Custom, Excise & Service Tax Tribunal
M/S Harish Aneja & Others vs Cce, Meerut Ii on 30 May, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066.
Date of Hearing : 30.05.2013
ST/392,404/2008
[Arising out of Order-in-Appeal No. 02/Commissioner/M-II/2008 dated 17.03.2008 passed by the Commissioner (Appeals), Central Excise, Meerut]
For Approval & Signature :
Honble Mr. Justice G. Raghuram, President
Honble Mr. Sahab 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?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether their Whether their Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
M/s Harish Aneja & Others Appellant
Vs.
CCE, Meerut II Respondent
Appearance:
Shri A.K. Batra, CA - for the Appellant
Shri Govind Dixit, DR - for the Respondent
Coram : Honble Mr. Justice G. Raghuram, President
Honble Mr. Sahab Singh, Member (Technical)
Final ORDER No. 56543-56544/2013
Per Sahab Singh :
These are two appeals one filed by M/s Harish Aneja and others (hereinafter to as referred to as assessee) and second filed by Revenue against same order in Original No.02/Commissioner/M-II/2008 dated 17.03.2008.
2. Brief facts of the case are that assessee was appointed as Depot Operator for distribution, marketing and sale of Country Liquor Products to retailers by M/s Kesar Enterprises Ltd., M/s Majhola Distillery and Chemical Works (MDCW) and National Industrial Corporation Ltd. (NICL). It was found that assessee has provided taxable service but has not paid service tax on the taxable service. Matter was investigated in detail by Central Excise officers by examining various agreements, records invoices issued and statements of various persons were recorded and thereafter a Show Cause Notice dated 23.10.2006 was issued to the assessee demanding service taxof Rs. 98,66,279/- along with interest and also proposing penalties under Section 75A, 76, 77 and 78 of the Finance Act, 1994 After due process, show come notice was adjudicated vide impugned order in which demand of Rs. 98,66,270/- was confirmed along with interest and following penalties were imposed on assessee.
(i) Penalty of Rs. 98,66,270/- was imposed under Section 78 of the Act.
(ii) Penalty of Rs. 200 per day with effect from 26.05.2001 till date of payment was imposed under Section 76 of the Act.
(iii) Penalty of Rs. 500 was imposed under Section 75A of the Act.
(iv) Penalty of Rs 1000 was imposed under Section 77 of the Act.
3. Above Order in Original is challenged by the assessee in the present appeal. Revenue has challenged the impugned order on the ground that upto 17.04.2006 penalty is imposable @ 200 per day as imposed by the Commissioner in the impugned order but with effect from 18.04.2006 till date of payment penalty is imposable @ 2% of outstanding tax amount per month till such failures continues as the same is higher the Rs. 200 per day and is mandatory under Section 76 of the Act.
4. Heard Shri A.K. Batra Ld. AR and Ld. Additional Commissioner (AR) at length.
5. After hearing both sides and examining the case records we find that in case of (MDCW) demand relates to period 2003-2004 to 2005-2006 based on the agreement date 13.06.2003, 17.04.2004 and 24.03.2005. M/s Rajni Aneja and others (Association of persons) has purchased CLP during the 2004-2005 Assessee also submitted sample bills before Commissioner during the course of personal hearing on 13.11.2007 and submitted that they are purchasing the goods in the name of individual AOP and then selling CLP through their shops. From the adjudication order it is not clear how many bills were produced before the Commissioner and examind by him. From the copies of bills submitted before us we find that all bills are in name of M/s Rajni Aneja and others and name of licensee is also shown M/s Rajni Aneja and others. It is the submission of the assessee that CLP was purchased by them and thereafter it was sold by them. In such a case how the service is classifiable as C & F service or Business Auxiliary Service (BAS). The Commissioner has not examined this aspect. Moreover Show Cause Notice has been issued to the assessee for classifying service as C & F service whereas a commissioner in case of MDCW has held that assessee has provided BAS to MDCW with effect from 01.07.2003 and confirmed the demand.
6. In case of NICL demand pertains to period 2001-2002 and 2004-2005. We find that there is an agreement dated 11.04.2001 between assessee and NICL for appointment as Depot Operator for organizing and promoting sale of their CLP for the year 2001-2002. There is no agreement between NICL and assessee for the period 2004-2005. Commissioner in the Order in Original has observed that since Show Cause Notice nowhere mentions that payment was received under head of freight, loading/unloading, general expenses and incentive, services provided by assessee to NICL is Business Auxiliary Service (BAS) with effect from 01.07.2003. For the period prior to 01.07.2003 there was no specific category of Commission Agents service. Commissioner applies Section 65 A for determination of classification of service. We find that Section 65A is applicable when there is a dispute about classification between two taxable services. When prior to 01.07.2003 BAS was not in existence, there is no reason to apply Section 65A in this case. Commissioner Classifies the service as C & F service for 2001-2002 and under BAS with effect from 01.07.2002 though there was no proposal classifying the service under BAS in the Show Cause Notice and he has confirmed the entire demand.
7. In view of our observations in above two paras, we find the matter needs to be remanded back to Commissioner for passing fresh order after examining all evidences placed before him by the assessee and after affording an opportunity of hearing to the assessee. Accordingly Order in Original is set aside and matter is remanded back to the commissioner for passing order afresh after observing principles of natural justice. Assessee appeal is allowed by way of remand. Since impugned order is set aside, revenue appeal for enhancing the penalty stands rejected.
(Justice G. Raghuram) President (Sahab Singh) Member (Technical) Neha 4