Custom, Excise & Service Tax Tribunal
M/S Amit Sales vs Cce, Jaipur-I on 1 July, 2010
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. 1
Service Tax Appeal No. 437 of 2008
DATE OF HEARING : 01.07.2010
DATE OF DECISION : 01.07.2010
FOR APPROVAL AND SIGNATURE :
HONBLE MR. JUSTICE R.M.S. KHANDEPARKAR, PRESIDENT
HONBLE DR. C. SATAPATHY, MEMBER (TECHNICAL)
HONBLE MR. ASHOK JINDAL, MEMBER (JUDICIAL)
1.
Whether Press Reporters may be allowed to see 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 of the Order ?
4.
Whether Order is to be circulated to the Departmental Authorities?
M/s Amit Sales .. Appellants
(Rep by Sh. Atul Gupta &
Sh. G. Natrajan, Advocates)
VERSUS
CCE, Jaipur-I .. Respondent
(Rep. by Shri V.K. Panda, Jt. CDR &
Shri Vijay Kumar, DR)
CORAM : HONBLE MR. JUSTICE RMS KHANDEPARKAR, PRESIDENT
HONBLE DR. C. SATAPATHY, MEMBER (TECHNICAL)
HONBLE MR. ASHOK JINDAL, MEMBER (JUDICIAL)
ORAL ORDER NO.___________________________
PER JUSTICE R.M.S. KHANDEPARKAR :
Heard the learned Advocate for the Appellant and learned Joint CDR for the Respondent.
2. This is a reference to the Larger Bench under order dated 1st October, 2008 passed by the Division Bench referring the following points :
(i) Whether in determining valuation of clearing and forwarding agent service charges such as go-down rent, loading and unloading, security charges, electricity, cartage, stationery and printing, telephone, fax charges, photo expenses, repacking charges, traveling charges, internet charges etc. are excluded on the ground that they are collected as reimbursement from the service receiver ?
(ii) Whether the judgments relied upon by the appellant referred above lay down the correct law ?.
3. The background in which the above points came to be referred to this Larger Bench as revealed from the referred order is as under:-
(2) It is admitted that the appellant is rendering the services of clearing and forwarding agent. What is in dispute is the valuation of the services. The appellant is collecting the service charges under two heads, one Head known as Commission and the other as reimbursement of expenses said to be on actual basis. It is claimed that the re-imbursement relates to expenses towards Go-down rent, loading and unloading charges, the charge relating to cartage, stationery, printing, telephone, electricity etc. On perusal of the records, we find that the appellant is primarily involved in rendering services as a clearing and forwarding agent and the break-up given looks very artificial. It is not clear as to what all activities are treated by the appellant as falling within the service of clearing and forwarding agent and what exactly the amount under the Head Commission stands for.
(3) Learned Company Secretary relies on the decision in the case of Sri Sastha Agencies Pvt Ltd Vs Assistant Commissioner - 2007 (6) STR 185 (Tribunal) and the following decisions which followed the decision in the case of Sri Sastha Agencies Pvt Ltd:
a) U.M. Thariath & Company Vs CC Cochin 2007 (8) STR 161 (Tri. Bang)
b) Sangamitra Services Agency Vs CCE Chennai 2007 (8) STR 233 (Tri-Chennai (SM Bench)
c) Jaylaxmi Enterprises Vs CCE Mangalore 2008 (9) STR 19 (Tri-Bang.)
d) Keralam Enterprises Vs CCE & ST Cochin 2008 (9)STR 503 (Tri-Bang)
e) APCO Agencies Vs CC & C. Ex., Calicut 2008 (10) 169 (Tri-Bang) (SM Bench)
f) S & K Enterprises Vs CC & C. Ex Calicut 2008 (10) STR 171 (Tri-Bang) (SM Bench) (4) On perusal of the above decisions, we do not find the reasoning for arriving at the decision to exclude the amounts collected as reimbursement of various expenses. The list of excluded category got enlarged in the later decisions following the decision given in Sri Sastha Agencies Pvt Ltd and has permitted not only charge reimbursed under specific head but under residuary heads by use of words such as like and etc.. To render any service, manpower, equipments and other facilities are required in varying proportions. No service can be rendered in a vaccum. The value for the services should be the gross amount charged and should be determined strictly as per Section 67 of the Finance Act, read with the Rules. We are, prima facie, of the view that the decisions rendered require re-consideration.
4. It is settled law that the question of referring the matter to a Larger Bench may arise either when there are conflicting decisions on the same issue or when the referral Bench finds it difficult to agree with the view taken on a particular issue by the earlier Bench of the Tribunal or when there is a substantial question of law of public importance involved in the matter and which relates to the matters falling within the jurisdiction of the Tribunal. However, while referring the matter to a Larger Bench, it is always expected from the referral Bench to disclose the reasons for taking a different view from the one already taken by the earlier Bench or the nature of conflict, if any, between the two decisions or the substantial question of law of public importance involved in the matter.
5. Perusal of the referral order in the matter in hand merely discloses that, the decisions which were sought to be relied upon by the appellants did not disclose the reason to arrive at a conclusion which was sought to be arrived at in each of those decisions. In the absence of any reasoning to arrive at a conclusion in an order would apparently reveal that such an order cannot be said to have laid down any principle of law as such. Any decision on this aspect, if required, one can safely refer to the decision of the Apex Court in the matter of Union of India vs Dhanvanti Devi, reported in 1996 (6) SCC 44. The Apex Court has elaborately described, as to how the ratio of a decision could be and should be carried out. It has been clearly stated that the ratio of a decision is to carve out on the basis of facts of the case, the point which arises for consideration and the reasoning disclosed to arrive at the finding on such points. In the absence of reasoning to support the conclusion, it cannot be said that the decision reveals any ratio as such.
6. Once the referral Bench had arrived at the finding that none of the decisions which were sought to be relied upon discloses the reasons for arriving at the conclusion, arrived at in those decisions, it was open to the Division Bench to decide the matter by considering the merits of the case and the law applicable to the facts of the case. In the absence of any law having been laid down in any of those decisions, the referral Bench was free to take the correct view in the matter in accordance with the provisions of law.
7. Para 4 of the referral order also discloses that the referral Bench had not arrived at any confirmed view on the point in issue nor the referral order discloses that the referral Bench was faced with any conflicting decision(s). In the circumstances, merely because the referral Bench found prima facie that the decisions taken by the earlier Bench could not be relied upon, that itself cannot be a ground for referring the matter to the Larger Bench.
8. We have elaborately dealt with the issue in the decision delivered yesterday i.e. 30.06.2010 in Excise Appeal No. 217 of 2007 in the matter of Steel Authority of India Ltd. vs CCE, Raipur.
9. In the circumstances, we are constrained to return the referral to the Division Bench for appropriate orders in accordance with the provisions of law. Ordered accordingly.
(JUSTICE R.M.S. KHANDEPARKAR) PRESIDENT (DR. C. SATAPATHY) MEMBER (TECHNICAL) (ASHOK JINDAL) MEMBER (JUDICIAL) *MPS* 6