Customs, Excise and Gold Tribunal - Bangalore
Sindhu Cargo Services Ltd. vs The Commissioner Of Service Tax on 15 May, 2007
Equivalent citations: [2007]11STJ211(CESTAT-BANGALORE)
ORDER T.K. Jayaraman, Member (T)
1. This appeal has been filed against the Order-in-Original No. 1/2006 dated 23.1.2006, passed by the Commissioner of Service Tax, Bangalore.
2. In the impugned order, the Adjudicating authority has confirmed a sum of Rs. 75,21,124/- towards the Service Tax payable by the appellants on the Agency Commission received during the period from 2000-04 under the provisions of Section 73 of Finance Act, 1994. An amount of Rs. 9,56,466/- has also been demanded being the Service Tax payable by the assessee on account of brokerage commission received form the customers for the period 2003-04. Interest under Section 75 of the Act has been demanded. Penalties under Sections 76 & 77 of the Act have been imposed, apart from penalty of Rs. 85 lakhs under Section 78 of the Act, equal to the alleged evaded amount of Service Tax. The appellants strongly challenged the impugned order.
3. Shri Laxmi Narayan, learned Advocate appeared for the appellants and Shri Anil Kumar, learned JDR appeared for the Revenue.
4. Heard both the sides in the matter.
5. We have carefully considered the matter. The appellant was providing taxable services under the category of Customs House Agent (CHA). They have 10 branches in different places. The registered office of the company is at Bangalore. The learned Counsel contended that the appellants have been regularly filing the statutory returns with the Department. They have also been paying the service tax regularly. However the demand on them has arisen on account of the audit report of the Department. A Show Cause Notice had been issued consequent to the audit report. The demand is on account of the service tax on Agency Commission charges from the customers and also the tax on brokerage commission. The appellant vehemently contended that they were charging service tax on all chargeable services rendered to their client and remitting the same to the service tax authority. They also operate as IATA Cargo Agent for which they were paid by the Airlines. The Airlines' Agency Commission has come under the service category of business with effect from 01.07.2003. Hence it was contended that the demand of service tax under Business Auxiliary Service prior to 01.07.2003 is patently illegal and without authority of law. It was also stated that all the Airlines including Air India and Indian Airlines have agreed to reimburse service tax on the Airlines' Agency Commission from 10.9.2004. The appellants have paid service tax under Business Auxiliary Service with effect from 10.9.2004 and have also brought themselves registered as service provider. As regards the brokerage commission, it was urged that no service tax is payable on the said charges. The Adjudicating authority has given a very brief order and there is no indication that all the documents submitted by the appellants had been examined by him. They also raised the question of jurisdiction as to whether the Adjudicating authority can adjudicate in respect of their branches at different places in India. In the interest of justice, we set aide the impugned order and remand the matter to the Original Authority to pass a de novo order. The Adjudicating authority shall examine all the documentary evidences submitted by the appellant and pass a speaking order. All issues are kept open.
(Operative portion of the order has been pronounced in the court on completion of hearing)