Customs, Excise and Gold Tribunal - Bangalore
Bhagyanagar Services vs The Commissioner Of Central Excise on 22 June, 2006
Equivalent citations: 2006(111)ECC416, 2006ECR416(TRI.-BANGALORE), 2006[4]S.T.R.22, [2007]6STT460
ORDER S.L. Peeran, Member (T)
1. These appeals arise from the Order-in-Appeal No. 6/2005 (H-IV) S. Tax dated 29.09.2005 and 4/2005 (H-IV) S. Tax dated 31.05.2005, passed by the Commissioner of Customs & Central Excise (Appeals-II), Hyderabad. As the issue is common in both the appeals, therefore they are taken up together for the disposal as per law.
2. The appellants are engaged in providing service as a Clearing and Forwarding agent to their clients M/s Ultra Tech Cemco Ltd. (formerly L & T Ltd.) who are the manufacturers of cement. The Department took verification of the agreements which revealed that they were also providing other services, namely loading and unloading of cement bags on the platform of Railways. They had also collected transportation charges. After a detailed consideration, the Commissioner (Appeals) held that both the activities are covered under the category of taxable service of Clearing & Forwarding agents. This is under challenge.
3. The learned Counsel submits that this Bench in the case of E.V. Mathai & Co. v. CCE, Cochin has clearly held that where separate contract exists for providing transport of the goods at different places and such transportation charges cannot be added to the charges of C & F agents. A copy of the order is produced. The learned Counsel submits that the issue on this point is covered in their favour. The issue pertaining to loading and unloading charges is concerned, the learned Counsel submits that this activity was brought under separate heading "Cargo Handling Services" with effect from 16.8.2002 by Finance Act, 2002. Therefore in view of this, the activity being treated separately by subsequent provisions of Finance Act, 2002, the charges on them cannot be added to the service of Clearing and Forwarding Agents. He also submits that this activity was known to the Department and hence the demand is barred by time. He contends that there is no suppression of facts. Therefore the larger period cannot be invoked in the matter. It is also submitted by the learned Counsel that the agreement clearly provides that the appellant shall reimburse the service tax on taxable services. He submits that what ever the service tax payable is reimbursed from the service receiver. He also submits that there was no intention on the part of the appellants to evade payment of duty. In this regard he relied on the following rulings:
(i) Hindustan Syringes Pvt Ltd. v. CCE 1998 (29) RLT 323
(ii) Rajasthan Cylinders & Containers v. CCE 1998 (29) RLT 423
(iii) Bihar Foundry & Engg. Works v. CCE
4. Heard the learned SDR who relied on the findings rendered in the impugned order.
5. On a careful consideration of the submissions made by both the sides, we notice that the issue pertaining to Clearing and Forwarding charges including transportation charges has been decided by the Tribunal in the case of E.V. Mathai & Co. v. CCE, Cochin (supra). It is clearly laid down in the said citation that there is an existence of separate contract entered into service as C & F agents and also to collect separate transportation charges and such charges cannot be added in the service tax paid by C & F agents. Therefore, applying ratio of the said judgment, the service tax demand is set aside. In so far as the service tax levied on loading and unloading charges, this activity has been brought under the service tax net by Finance Act, 2002 under the category of "Cargo Handling Services". Further more, we find that there was no intention to evade payment of service tax as in any case, such expenditure is reimbursed from the service receiver. Therefore the plea of the appellants that they are in a bonafide belief that this charge is not to be added in the service of C & F agents is required to be accepted. The impugned order is not legal and proper and the same is set aside. The appeals are allowed with consequential relief.
(Dictated and pronounced in the open court)