Custom, Excise & Service Tax Tribunal
M/S Pepsi Foods Pvt.Ltd. Concentrate ... vs Cce, Delhi-Iii, Gurgaon on 21 October, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SCO 147-148, SECTOR 17-C, CHANDIGARH-160 017
COURT NO.1
Appeal No. ST/639-913/2012-(SM)
[Arising out of the Order-in-Appeal No.24/ST/Appeal/Chd-II/2012 dated 07.02.2012, Order-in-Appeal No.112/ST/Appeal/Chd-II/2012 dated 23.03.2012 passed by the CCE (Appeals), Chandigarh-II)
Date of Hearing/Decision: 21.10.2016
For Approval & signature:
Honble Mr. Ashok Jindal, 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 would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
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 Pepsi Foods Pvt.Ltd. Concentrate Division
M/s Pepsi Foods Pvt. Ltd.
Appellants
Vs.
CCE, Delhi-III, Gurgaon Respondent
Appearance Ms. Krati Somani, Advocate- for the appellant Sh. G.M. Sharma, AR -for the respondent CORAM: Honble Mr. Ashok Jindal, Member (Judicial) FINAL ORDER NO.: 61556-61557/2016 Per Ashok Jindal:
The appellant is in appeal against the impugned order.
2. The facts of the case are that the appellant is engaged in the manufacture of concentrate. The various bottlers who use the same to manufacture carbonated beverages or fruit juice or pulp based drinks and the concentrate is transferred to the bottlers at the factory gate and the transportation cost was borne by the bottlers. As the appellant is paying transportation cost to the transporters and not paying service tax thereon, therefore, the show cause notices were issued to the appellant, to demand service tax under the category of GTA services along with interest and to impose penalty on the appellant by invoking extended period of limitation. The appellant paid service tax along with interest and did not pay penalty. The matter was adjudicated. The demand of service tax along with interest was confirmed against the appellant and penalties were also imposed. Aggrieved from the said order, the appellant is before me.
3. The ld. Counsel for the appellant submits that as per the purchase agreement, the transportation cost was borne by the bottlers not by the appellant. The appellant have only arranged for transportation of concentrate on behalf of the bottlers and has paid the transportation cost which has been recovered from the bottlers, in that circumstances, the appellant is not liable to pay service tax although the appellant has paid service tax alongwith interest, therefore, no penalty is imposable on the appellants and extended period of limitation is not invokable as there was no mala-fide intention of the appellant not to pay service tax on GTA services in the light of the decision of this Tribunal in the case IIT vs- 2010 (17) STR (420) (Tri. Bang) which have been affirmed by the Honble High court in the case of the Honble Andhra Pradesh High Court reported in 2012 (26) STR 97 (AP).
4. On the other hand, the ld. AR submits that as the appellant itself has arranged for transportation and paid transportation cost which has been recovered from the bottlers. In that circumstance, the transportation service has been utilised by the appellant. They are liable to pay service tax thereon. The appellant cannot take the benefit of bona-fide intention as the appellant itself has arranged transportation and paid the transportation changes to the transporters. In that circumstances, the extended period of limitation is rightly invoked and the penalty is rightly imposed on the appellant.
5. Heard the parties and considered the submissions.
6. In this case the appellant itself has arranged for transportation and paid the transportation cost and the same has been recovered from the bottlers. The contention of the appellant is that they were under bona-fide belief that the transportation cost is borne by the bottlers and they are required to pay service tax. In this case, the appellant itself has arranged for transportation and paid transportation changes. In these circumstances, as per Rule 2(1)(d)(iv) of the service tax Rules, 1994, the appellants are liable to pay service tax as they are paying freight charges to the transporters on behalf of the bottlers and as per the said provisions, they are liable to discharge the service tax liability on the GTA services. As the appellant did not pay service tax therefore, I hold that the appellant is liable to pay service tax along with interest during the impugned period on GTA services.
7. The next issue arises that whether the appellant was under bona-fide belief that they are not liable to pay service tax?
8. I find that in this case the appellant has arranged for transportation and paid transportation changes, in that circumstances, the appellant is liable to pay service tax on GTA Service under reverse charges mechanism. Therefore, I hold that the extended period of limitation is rightly invoked in this case.
8. The next issue arises, whether the appellant can be given the benefit of section 80 of the Finance Act, 1994 to impose penalty or not? In this case, the appellant has paid service tax along with interest and the appellant has not got any benefit. In that circumstances, the benefit of section 80 can be given to the appellant. By giving the benefit of section 80 of the Finance Act, 1994, I drop the penalty against the appellant.
9. At this stage, the Ld. AR objected that it is not clear that the appellant has discharged the service tax liability or not. This fact is to be verified at the end of the adjudicating authority. Therefore, the matter is remanded back to the adjudicating authority to verify the fact whether the appellant has paid the service tax along with interest or not, if Service tax has paid along with interest, the proceedings against the appellants shall come to an end otherwise the adjudicating authority is at the liberty to pass an order in terms of law.
With these terms the appeal is disposed off by way of remand.
(Dictated & Pronounced in the open court) Ashok Jindal Member (Judicial) rt 1 ST/639-913/2012 Pepsi Food pvt. Ltd. Concentrate Devision Vs. Chandigarh-II