Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise vs Helios Food Additives Pvt Ltd on 21 July, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT No. II APPEAL No.ST/274/10 (Arising out of Order-in-Appeal No.PII/PAP/13/2010 dated 25/01/2010 passed by Commissioner of Central Excise (Appeals), Pune) For approval and signature: Honble Mr. P.R. Chandrasekharan, Member (Technical) ========================================
1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should 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 :Seen of the Order?
4. Whether Order is to be circulated to the Departmental :Yes authorities?
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Commissioner of Central Excise Appellant Kolhapur
Vs.
Helios Food Additives Pvt Ltd., Respondent
Appearance:
Shri.Sanjay Kalra, JDR for appellant
Shri.D.H.Nadkarni, Advocate for respondent
CORAM:
Honble Mr. P.R. Chandrasekharan, Member (Technical)
Date of hearing : 21/07/2011
Date of decision : 21/07/2011
ORDER NO
Per: P. R. Chandrasekharan
1. This appeal is filed by the department against the order-in-appeal No.PII/PAP/13/2010 dated 25/01/2010 passed by the Commissioner of Central Excise (Appeals), Pune-II.
2. Briefly, stated the facts of the case are as follows:-
2.1 M/s.Helios Food Additives Pvt Ltd., Chiplun, District Ratnagiri (assessee in short) are manufacturers of Food products falling under various chapters of Central Excise Tariff. They are also engaged in providing the taxable services of renting immovable properties at Mumbai. During the course of audit of the records of the company, it was noticed that they have not discharged the service tax liability on the renting of immovable properties during the financial year 2007-2008. Accordingly, a show-cause notice dated 05/03/2009 was issued proposing to demand of service tax of Rs.2,62,032/- under Section 73 of the Finance Act, 1994, interest thereon under Section 75 and also proposing to impose penalties under Section 76, 77 & 78 of the said Finance Act.
2.2 The assessee contested the demand and submitted that the service has been rendered in Mumbai and they are registered for service tax at Mumbai and, therefore, the Assistant Commissioner at Ratnagiri does not have the jurisdiction to issue notice. However, the said Assistant Commissioner passed an order confirming the duty demand and interest thereon and also imposing a penalty equal to the amount of service tax under Section 78 of the Finance Act, a penalty of Rs.1,000/- under Section 77, a penalty @ Rs.200/- per day under Section 76 and a penalty of Rs.2,000/- under Section 70. The assessee preferred an appeal before the Commissioner (Appeals), who vide the impugned order set aside the lower adjudicating authoritys order-in-original and allowed the appeal on the ground that since the appellants were already registered in Mumbai, the Assistant Commissioner at Ratnagiri does not have any jurisdiction either to issue notice or to demand service tax. Against the said order of the lower adjudicating authority, the department is in appeal before me.
3. The grounds urged in the appeal are that since the factory of the assessee is situated at Ratnagiri, the Assistant Commissioner Ratnagiri has jurisdiction over the factory of the assessee and the assessee also has been issued with a service tax registration at Ratnagiri. Inasmuch as the assessee has provided the taxable service of renting of immovable property without payment of service tax, they are liable to pay service tax on the said service.
3.1 The Ld. JDR appearing for the department reiterates the ground urged in the appeal.
4. The Ld. Counsel for the respondent/assessee submits that the Commissionerate at Pune-II has jurisdiction in the Districts of Sindhudurg, Ratnagiri, Sangli, Kolhapur and Satara of the State of Maharashtra vide notification No.14/2002-CE(NT) dated 08/03/2002. As far as Mumbai is concerned, the jurisdiction lies with the Mumbai Central Excise Commissionerate. Since the Central Excise officers have been entrusted with the task of enforcing the provisions of service tax law, their jurisdiction in respect of service tax is concurrent with the jurisdiction of Central Excise. Therefore, the Assistant Commissioner in Ratnagiri does not have any power to initiate proceedings and recover service tax in respect of services rendered in Mumbai as the same falls outside his jurisdiction. The Ld. Counsel also submits that they have obtained a separate registration for service tax at Mumbai on 29/01/2009, which is much before the issuance of show-cause notice dated 05/03/2009. They also submit that they have their registered office in Mumbai and, therefore, the competent authority to initiate proceedings in relation to service tax is the jurisdictional Assistant Commissioner of service tax, Mumbai. They also rely on the judgement of this Tribunal in the case of CCE,C&ST, BBSR-II Vs. Ores India (P) Ltd., reported in 2009 (91) RLT 81 (CESTAT-Kol), wherein it has been held that the Commissioner, in whose territorial jurisdiction the registered office of service provider is located, has jurisdiction over him irrespective of the place where service is provided. In the light of these submissions, the Ld. Counsel contends that the proceedings initiated at Ratnagiri are not sustainable in law and, therefore, the order of lower appellate authority has to be upheld.
5. I have carefully considered the rival submissions.
6. There is no dispute about the fact that the service of renting of immovable property was undertaken by the respondent/assessee at Mumbai and the registered office of the assessee is also in Mumbai. It is, further, on record that the respondent/assessee had obtained service tax registration in Mumbai from the Assistant/Deputy Commissioner of service tax Division-V, Mumbai, vide registration certificate dated 29/01/2009. That being the position, the competent authority toe issue show-cause notice and recover service tax in respect of services rendered in Mumbai, is the Assistant Commissioner of service tax in Mumbai and not the Assistant Commissioner of Central Excise at Ratnagiri. This Tribunal in the Ores India (P) Ltd., case (referred to supra) has clearly held that as per Rule 3 of Service Tax Rules, 1994 read with Boards order No.1/94 dated 29/06/94 it is the Commissioner in whose territorial jurisdiction, the registered office of the service provider is located, has the jurisdiction over him irrespective of the place where service is provided. In the instant case, the service has been provided at Mumbai and the registered office is also situated in Mumbai. Therefore, the Assistant Commissioner, Ratnagiri has no jurisdiction over the activities undertaken by the respondent in Mumbai. Therefore, the proceedings initiated by the Assistant Commissioner, Ratnagiri is unsustainable in law, as rightly held by the lower appellate authority. Thus, the departmental appeal is devoid of merits and, accordingly, the same is dismissed.
(Pronounced in Court) (P.R. Chandrasekharan) Member (Technical) pj 1 2