Custom, Excise & Service Tax Tribunal
M/S A N P Computers vs Commissioner Of Central Excise, ... on 27 June, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No. 21041 / 2014 Application(s) Involved: ST/COD/28439/2013 in ST/27888/2013-DB ST/Stay/28440/2013 in ST/27888/2013-DB Appeal(s) Involved: ST/27888/2013-DB [Arising out of the Order-in-Appeal No. 61/2013 dated 06/03/2013 passed by Commissioner of Central Excise (Appeals), Mangalore] M/s A N P Computers Bindiganavale Road, T.B. Extension, Nagamangala MANDYA - 571432 KARNATAKA Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax Mysore S1-S2, VINAYA MARGA, SIDDHARTHA NAGAR, MYSORE 570011 Respondent(s)
Appearance:
Mr. K.PARAMESWARAN, ADV FLAT NO.101, SURAJ SADAN, NO.23, II CROSS, (RAMACHANDRA ROAD) GANDHINAGAR, BANGALORE -560 009 For the Appellant Mr. A. K. Nigam, A.R. For the Respondent CORAM:
HON'BLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER ________________________________________ Date of Hearing: 27/06/2014 Date of Decision: 27/06/2014 Per B.S.V. MURTHY Appeal has been filed with a delay of 120 days. Learned counsel submitted that after receiving the order, appellant who is an individual handed over the impugned order to a Chartered Accountant for filing the appeal. However, while he was demonstrating the Javelin Throw to students, he slipped and fell and thereafter, felt severe back pain which virtually disabled him and he underwent treatment which caused the delay in filing the appeal. We find that delay has been explained satisfactorily and accordingly, the delay is condoned.
2. The following submissions were made in writing which are reproduced for better appreciation :
2.1 It is submitted that service rendered for imparting computer education particularly in respect of Extended Mahithi Sindhu Project (MSP) for the Government High School Students as part of regular curriculum as per the Government of Karnataka/DSERT through KEONICS cannot prima facie be classified under the category of commercial training or coaching services as per the agreements entered into, essentially in view of the following :
(i) The services involved related not only for providing computer education but also maintaining the computer and computer peripheral etc., and relates to 41 Government High Schools in Mandya District.
(ii)Services are provided on behalf of KEONICS and that too for students of class 8th, 9th & 10th based on syllabus approved by Government of Karnataka/DSERT in the medium of instruction viz., Kannada/English, which will become evident from the scope of contract, in the agreement dated 01/08/2007. Thus the said imparting of computer training being in the nature of education and is being provided as part of curriculum and on behalf of the said KEONICS thereof.
(iii) Moreover, the said education as part of curriculum is also placed in the negative list even for the period subsequent to 01/7/2012 and hence could not be taxed even for the earlier periods thereof. In any case, the same has been confirmed in the letter dated 24/11/2009 {at page 290 of the appeal paper book] sent by KEONICS to the jurisdictional service tax authorities.
(iv) Thus, the said service provided would get covered only under Business Auxiliary Service and would get exempted as the same has been provided on behalf of KEONICS who were entrusted the said task throughout Karnataka and covering 1011 Government High Schools under the said MSP Scheme.
(v) Further, it is submitted that being a service relating to education would get exempted under Notification No. 14/2004 dated 10/09/2004.
(vi) Moreover, the service rendered is only by the applicant herein particularly for the said MSP and for which full service tax had already been discharged by the said KEONICS and even the refund claimed had been rejected as per Order-in-Original dated 31/5/2011 and other evidences enclosed as Annexure-L and thus demanding service tax once again on the applicant herein, particularly for the said MSP project would amount to double taxation.
(vii) It is submitted that the principle laid down and relied upon for passing the said orders by the learned lower authorities viz., in the case of SEW Construction Ltd. vs. CCE, reported in 2011 (22) STR 666 (Tri. Del.) is clearly distinguishable as the said decision was rendered in the context of non-production of evidence regarding the discharge of service tax and also not taking registration etc. to claim bona fides, which is not the factual position herein.
(viii) Thus the entire demand of service tax confirmed in respect of the said MSP project for a total amount of Rs. 14,48,552/- (with Ed. Cesses), on the applicant herein would deserve to be set aside in toto thereof. In this connection, respectful reliance is placed on Misc. Order No. 27002/2013 dated 26/8/2013.
2.2 The balance amount of service tax involved of Rs. 1,74,124/- relates to franchisee services under the brand name of KEONICS YUVA.COM, being also in the nature of providing computer education and hence cannot become commercial training or coaching and in any case already an amount of Rs. 65,240/- has been paid which has been ordered to be appropriated thereof.
2.3 Moreover, the major portion of the demands made would be hit by limitation/time bar in the facts and circumstances of the matter involved herein and hence cannot be considered as willful suppression, with intent to evade payment of service tax, particularly as the issue involved is interpretational in nature and thus substantial portion of the demand made beyond the normal period would also be hit by limitation/time bar, particularly in the light of the principles laid down in several decided case laws applicable in this regard.
2.4 Above, all the impugned order-in-original relies upon letters dated 28/12/2011 and 29/11/2011 which have been sent by the said M/s KEONICS to the Superintendent of service tax in Bangalore and which have been specifically relied upon in paragraphs 67 and 68 of the order-in-original dated 31/08/2012 and the said documents have been obtained and relied upon, after issue of show cause notice on 19/9/2011 and hence the applicant herein was not aware of the same and not could not submit any defence to the same.
2.5 In any case, the above said evidence could not have been relied upon, that too, for the first time in the said order-in-original dated 31.8.2012, as they have been collected behind the back of the applicant herein and also after the issue of show-cause notice and which was not made available to the applicant herein. Thus holding that the applicant herein has received service tax from the said KEONICS, including to the extent indicated therein, would be unsustainable and the applicant herein had no opportunity to defend the same. Thus for this prima facie reason alone, the impugned orders would deserve to be set aside and matter remanded to the original authority for de novo adjudication in the interest of justice and in compliance with the principles natural justice thereof. Even the said reliance placed at paragraphs 67 and 68 of the said order-in-original dated 31/08/2012, only relates to the alleged service tax having been paid of Rs. 5,43,295/- for the period form August 2009 to May 2010 and no such service tax payment having been made for the prior periods is forthcoming thereof.
2.6. Similarly it is also incorrect to assume that the consideration received is inclusive of service tax, particularly for the said MSP and the same has not been substantiated with any material acceptable as evidence thereof, particularly while passing the said order-in-original dated 31/08/2012 and all the pleadings made in this regard have been just like that brushed aside and ignored, including while passing the impugned order-in-appeal thereto.
2.7. Further in respect of the demand made for the franchisee agreement of Rs. 1,74,124/-, an amount of Rs. 65,240/- has already been paid and the balance payable would work out only to Rs. 1,08,884/- and nothing beyond that thereto. In any case even the said amount is not payable as per the detailed pleadings made in the appeal petition in this regard.
2.8. The appellant herein also pleads undue financial hardship inasmuch as they are only proprietary concern and are facing severe financial crunch and in support of the same copy of bank account submitted along with the stay petition is being respectfully relied upon thereto.
3. After considering the submissions made above, we find that the matter is required to be remanded to the original adjudicating authority. This is because, the letters obtained after issue of show-cause notice should have been provided to the appellants. Even though learned A.R. said that the appellant himself has admitted the realization of service tax from KEONICS, on going through the records, we find that there is no clarity on this issue. At the same time, it cannot be said that the appellants are not liable to tax and in our opinion, at least an amount of Rs. 2 lakhs is clearly payable by the appellant and it may not be appropriate to remand the matter without putting the appellant into terms. In view of the above submissions, taking into account the interest quantum also, the appellant is required to deposit an amount of Rs. 3,00,000/- (Rupees Three lakhs only) within 12 weeks and report compliance on 09/10/2014. Subject to compliance with the above requirement, the requirement of pre-deposit of balance dues is waived. It is made clear that compliance should be reported to the original adjudicating authority on 09/10/2014 and thereafter, after providing the letters received from KEONICS as required by the appellant, the original adjudicating authority shall proceed to on the matter afresh in accordance with law after observing the principles of natural justice. We make it clear that we have not expressed any opinion which is required to be considered by the adjudicating authority.
(Operative portion of the order has been pronounced in open court) (S.K. MOHANTY) JUDICIAL MEMBER (B.S.V. MURTHY) TECHNICAL MEMBER /vc/