Custom, Excise & Service Tax Tribunal
State Bank Of India, Commercial Branch vs Commissioner Of Customs, C.Ex & St on 3 November, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI Appeal No.ST/121/2010 [Arising out of Order-in-Appeal No.69/2009-ST dt. 19.11.2009 passed by the Commissioner of Central Excise & Service Tax (Appeals), Coimbatore] State Bank of India, Commercial Branch Tiruppur Appellant Versus Commissioner of Customs, C.Ex & ST, Coimbatore Respondent
Appearance:
Shri Joseph Prabhakar, Advocate For the Appellant Shri K. Veerabhadra Reddy, JC (AR) For the Respondent CORAM :
Honble Ms. Sulekha Beevi C.S. Member (Judicial) Honble Shri Madhu Mohan Damodhar, Member (Technical) Date of hearing / decision : 03.11.2017 FINAL ORDER No. 42602 / 2017 Per Bench The appellants are registered with service tax department under the category of 'Banking and Other Financial Services' (BOFS). They had received an amount of Rs.1,85,07,942/- as foreign exchange remuneration for the year 2004-05 to 2006-07 by profit sharing of their Foreign Department, housed at Calcutta. Pursuant to an audit conducted by the department in 2004-05, it was noticed that appellants were liable to pay service tax on the share of profit earned from their Head office at Calcutta. SCN was issued raising the above allegation and proposing to demand service tax on the above stated amount along with the interest and also for imposing penalties. After due process of law, original authority confirmed the demand along with interest and imposed penalty which was upheld by the Commissioner (Appeals). Hence this appeal.
2. On behalf of appellant, Ld. counsel Shri Joseph Prabhakar argued both on merits as well as on the ground of limitation.
2.2 On merits, Ld. Counsel submitted that amount received by them is the amount received by their Head office which is transferred as profit to the branch office. Appellant is not engaged in any activity of foreign exchange broking as alleged in the SCN and therefore the said amount received by them is not subject to levy of service tax. He also adverted to the SCN in which it is clearly stated that the amount received is not a commission but actually a share of profit earned by distribution from the foreign department of the Head office at Calcultta. He argued that the authorities below have discussed the issue on a wrong impression that the appellant has earned foreign exchange and that the amount received is 'commission' in the hands of the appellant.
2.3 On the ground of limitation, ld. counsel argued that the audit was conducted in 2004-05 and the appellant vide their letter dt. 17.4.2006 had submitted all the details with regard to profit shared by their HO's foreign department at Calcutta. However, a show cause notice was issued after a period of more than 2 years on 21.5.2008 invoking extended period and alleging suppression of facts; that appellant had disclosed the entire details to the department and had maintained proper accounts and therefore the allegation of suppression of facts is without any basis.
3. Ld. A.R Shri K. Veerabhadra Reddy reiterated the findings in the impugned order as well as the order in original passed by the adjudicating authority.
4. Heard both sides. On going through the records, we find that in the SCN, the amount received is stated as profit shared from the Head office foreign department branch housed at Calcutta. Even in the accounts, the said amount is not shown as a commission received from the head office and it is shown merely as profit earned from the head office. So also, the department has not been able to establish that any activity was done by the appellant on which the appellant has received a commission from foreign exchange broking etc. Further, the appellant has also made out a case on limitation since being a Public Sector Undertaking, the appellant has been maintaining proper accounts and pursuant to audit had disclosed all details on 17.4.2006 itself. Thus the SCN alleging suppression of facts is without any basis and therefore we find that the appeal succeeds both on merits as well as on the ground of limitation. Impugned order is set aside. Appeal is allowed with consequential relief, if any, as per law.
(dictated and pronounced in court)
(Madhu Mohan Damodhar) (Sulekha Beevi C.S)
Member (Technical) Member (Judicial)
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Appeal No.ST/121/2010