Custom, Excise & Service Tax Tribunal
Customs & Central Excise, Vs. M/S ... vs Indore on 16 January, 2009
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-III Date of hearing/decision:16.1.2009 Service Tax Appeal No.162 of 2007 Arising out of the order in appeal No.IND-I/378/2006 dated 26.12.2006 passed by the Commissioner (Appeals)-I, Customs & Central Excise, Indore. For Approval and Signature: Honble Mr. M. Veeraiyan, Member (Technical) Honble Mr. P.K. Das, Member (Judicial) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of 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? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Appellant Respondent
Customs & Central Excise, vs. M/s Ranbaxy Lab Services Indore Appearance:
Shri A.K. Madan, Authorized Departmental Representative (DR) for the Revenue and Shri Harish Bindumadhvan, Advocate for the respondent Coram: Honble Mr. M. Veeraiyan, Member (Technical) Honble Mr. P.K. Das, Member (Judicial) Order No.____________________ Per P.K. Das:
Heard both sides and perused record.
2. Revenue filed this appeal against the order in appeal No. IND-I/378/2006 dated 26.12.2006 passed by the Commissioner (Appeals), Indore.
3. The respondents are engaged in the collection of pathological samples from the patient for testing by M/s Speciality Ranbaxy Ltd., Mumbai. It is a mere collection centre appointed by Speciality Ranbaxy Ltd. Service tax was demanded under the category of Business Auxiliary Service.
4. On perusal of the order of the Commissioner (Appeals), we find that the Commissioner (Appeals) passed the order following the decision of the Tribunal in the case of Dr. Lal Path Lab Pvt. Ltd. vs. C.C.E., Ludhiana 2006 (4) STR 527 (Tri-Del.), which has been upheld by the Honble Punjab & Haryana High Court as reported in 2007 (8) STR 337 (P & H).
5. Learned DR reiterates the grounds of appeal. He submits that in the instant case, the respondents spend 10% commission for market development, which is clearly a promotion or marketing service covered under sub-clause (i) and (ii) of the definition of Business Auxiliary Service. He also submits that it appears from the order of the Tribunal in the case of Dr. Lal Path Lab (supra) that this fact was not before the Bench.
6. After hearing both sides, we reproduce the relevant portion of the order of the Commissioner (Appeals):-
4. The appeal is being taken up for final disposal after dispensing with pre-deposit of duty and penalty amounts. On a careful consideration of the written submissions made by the appellants. I find the dispute in the present appeal relates to demand of service tax in relation to collection of pathological samples and receiving payments through an agreement from SRL, Mumbai. According to the department, the collection of samples and sending the same to SRL, Mumbai as per the contract entered with them would come within the purview of Business Auxiliary Service. Hence the Adjudicating Authority confirmed the demand of service tax on the appellants. The appellants have , however, strongly contended that what they deducted was actually their margin amount which was called as discount for easy reference. Further, the whole dealing was based on principal to principal basis on sub-contract basis and that they are not an agent of SRL, Mumbai and the development of market related for their own benefit and hence they would not fall under the category Business Auxiliary Services. In support of their argument, they have also relied upon Tribunals Final Order No.289-292/06-ST dated 30.8.06 in the case of Dr. Lal Path Lab., Ludhiana & others in which it was held that collection centres engaged in collection of samples and forwarding the same to the concerned laboratories for testing would not come within the purview of Business Auxiliary Services. One of the collection centres covered by the order dated 30.8.06 was acting as a collection centre for M/a SRL, Mumbai and therefore, the order of the Tribunal would be squarely applicable to the present case also. On perusal of the order of the Commissioner (Appeals), it is seen that the commission related to 10% is for development of market related to the respondent own benefit. We find that on the same issue, the respondents were also party in the case of Dr. Lal Path Lab. Pvt. Ltd. (supra) which is upheld by the Honble Punjab & Haryan High Court.
7. In view of that, we do not find any reason to interfere with the order of the Commissioner (Appeals). Accordingly, the appeal filed by the Revenue is rejected.
(Dictated and pronounced in the open Court) (M. Veeraiyan) Member (Technical) (P.K. Das) Member (Judicial) scd/