Custom, Excise & Service Tax Tribunal
M/S. Atma Ram Auto Enterprises vs Cce, Kanpur on 23 July, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
BENCH-DB
Date of Hearing: 23.07.2014
For Approval & Signature :
Honble Mr. Justice G. Raghuram, President
Honble Mr. R.K. Singh, Member (Technical)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3.
Whether their Lordships wish to see the fair copy of the order?
4.
Whether order is to be circulated to the Department Authorities?
Service Tax Appeal No.ST/760/2008 Cu[DB]
[Arising out of Order-in-Original No. 337/ST/APPL/KNP/2008 dated 12.07.2008 passed by the Commissioner (Appeals), Central Excise, Kanpur]
M/s. Atma Ram Auto Enterprises, Appellant
Vs.
CCE, Kanpur Respondent
Service Tax Appeal No.ST/778/2008 Cu[DB] [Arising out of Order-in-Original No. 337/ST/APPL/KNP/2008 dated 12.07.2008 passed by the Commissioner (Appeals), Central Excise, Kanpur] CCE, Kanpur Appellant Vs. M/s. Atma Ram Auto Enterprises, Respondent Present for the Appellant : Shri Jitin Singhal, Advocate Present for the Respondent : Shri Govind Dixit, DR FINAL ORDER NO. 53174-53175 dated 23.07.2014 PER: R.K. Singh This order is being issued in respect of appeal No. ST/760/2008-CU[DB] filed by M/s. Atma Ram Auto Enterprises (hereinafter referred to as the appellants) against Order-in-Appeal No. 337/ST/APPL/KNP/2008 dated 12.07.2008 and Appeal No. ST/778/008-CU[DB] filed by Revenue against the same Order-in-Appeal.
2. The facts, briefly stated, are as under:
The appellants were authorised dealers of M/s. Mahindra & Mahindra Ltd. and M/s. Hero Honda Motors Ltd. and registered under the category of Business Auxiliary Service. It was found on scrutiny of their records that during the years 2003-04, 2004-05 and 2005-06 they had received commission from banks as well as insurance companies and also received some payments from M/s. Mahindra & Mahindra Ltd. and M/s. Hero Honda Motors Ltd. It was alleged in the Show Cause Notice dated 28.05.2007 that the said amounts were liable to service tax under Business Auxiliary Service and extended period was invocable due to wilful mis-statement/suppression of facts by the appellants. While original adjudicating authority confirmed the demand of service tax on the entire amount along with interest and penalties the appellate authority came to a finding that the amounts received from M/s. Mahindra & Mahindra Ltd. and M/s. Hero Honda Motors Ltd. were not liable to service tax but the amounts received as commission from banks and insurance companies were liable to service tax under Business Auxiliary Service because the same were received for services rendered in relation to marketing of their products as was evident from the facts available on record. The Commissioner (Appeals) also conceded that the appellants were entitled the cum-tax benefit and accordingly confirmed the demand of service tax of Rs. 3,98,759/-. The appeal filed by the appellants is against the said confirmation of demand.
The Commissioner (Appeals) also observed that the appellants had already deposited the impugned service tax demand along with interest before the issue of Show Cause Notice and that from the facts and circumstances of the case it was clear that there was no mens rea on their part. The Commissioner (Appeals) further observed that there was not intent to evade service tax, and extended the benefit of section 80 of Finance Act 1994 to the appellants with regard to penalties under sections 76 and 78 although the penalties imposed under Sections 75 and 77 were upheld as these were levied for the failure to comply with the procedure. The Revenue has filed appeal against the said Order-in-Appeal on the ground that the appellants did not deposit the impugned service tax on their own and did so only after the evasion was detected by the Department and that the penalty under Section 76 doesnt require mens rea and therefore the benefit of section 80 should not have been extended to the appellant with regard to penalties under Section 76 and 78 of the Finance Act 1994.
3. In their appeal the appellants have contended that the commission received by them from banks and insurance companies was not classifiable under Business Auxiliary Service as they had only provided table space to their (i.e. banks and insurance companies) representatives and that there was no suppression or wilful mis-statement on their part and therefore extended period can not be invoked. The Ld. DR reiterated the contentions contained in the Revenues appeal.
4. We have considered the facts and submissions. We find that the Commissioner (Appeals) has given a clear finding based on documentary evidence that the commission received by the appellants from banks and insurance companies was in relation to marketing of their product. The appellants have not given any evidence to the contrary. The service rendered in relation to marketing of the products of banks and insurance companies is expressly covered under the category of Business Auxiliary Service as seen from the definition thereof given in Section 65(19) of Finance Act 1994 which includes service in relations to promotion or marketing of service. Further this issue is covered in favour of Revenue in the CESTAT Larger Bench decision in the case of M/s. Pagariya Auto Center Vs. CCE Aurangabad Interim Order No. M/35/14/SMB/LB/C-IV dated 12.09.2013 (2014-TIOL-141-CESTAT-DEL-LB).
5. In view of above discussion, we find that the appellants appeal is not sustainable.
6. As regards the Revenues appeal, it is seen that the Commissioner (Appeals) has categorically observed that there was no mens rea or intention on the part of the appellants to evade service tax which they had paid alongwith interest even before the issue of Show Cause Notice. In these circumstances, when it is held that there was no mens rea on the part of the appellants extending the benefit of Section 80 can not be said to be illegal, perverse or even unreasonable. The Revenue also seems to be conceding the absence of Mens rea when it is contended by them that mens rea is not a pre-requisite for penalty under Section 76. It is pertinent to mention that the impugned order can not be over-ruled merely because some other equivalent authority may have come to a different conclusion with regard to extending the benefit of Section 80 in the given circumstances. To set aside the impugned order, Revenue has to show that the said order is illegal, perverse or unreasonable with regard to extending the said benefit in the given circumstances. The Revenue has evidently failed to do so. Consequently the Revenues appeal also does not sustain.
7. In the light of foregoing the appellants appeal is dismissed and Revenues appeal is also rejected.
[Dictated & Pronounced in the open Court].
(Justice G. Raghuram) President (R.K. Singh) Technical Member Neha 4