TaxTMI 
TaxTMI 
2015 (4) TMI 577
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....nt venture among (i) ACC Ltd., (ii) the Government of India, Ministry of Industries, (iii) IDBI and (iv) ICICI Bank. BCCL is primarily a packing station to receive cement in bulk and storing the same and distributing as per instructions of ACC Ltd. 2.2 BCCL under agreement have acted as a clearing and forwarding (C&F) Agent for ACC Ltd. and carried out its C&F activities at its warehouse at Kalamboli, near Panvel under year-wise agreements. It is registered with Service Tax Department since 18.12.2003. 2.3 The scope of service includes- (a) The noticees are providing their special rail wagons for transport of the cement; (b) the noticee makes available special wagons for transportation in India Railways from M/s Associated Cement Companies Ltd, Wadi Plant located at Wadi (Karnataka) to Kalamboli (Maharashtra); (c) the noticee makes available its specialist equipment and arranges for unloading cement brought in on account of the client into silos; (d) the noticee will block silo space for storage of clients cement; (e) the noticee will load clients cement available in its silos into special tanker trucks for dispatch for its use at the client's project; (f) the noticee ....
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....ays. The notice then recovers the freight amount from the other clients and reimburses 77.5% to M/s ACC Ltd. and retains 22.5% with themselves towards freight rebate. The noticee is not paying Service Tax on these charges. (D) Re-imbursement of secondary freight: For movement of cement by road from 'Kalamboli' to the site of the clients, M/s ACC Ltd. has entered into a contract with M/s Allsinghani Transport'. M/s ACC Ltd. is making the payments for all the consignments directly to the transporter which includes "octroi & Cess'. In respect of goods pertaining to clients other than M/s ACC Ltd. the notice is recovering the 'Road transportation charges' by issue of an invoice and re-imbursing the same to M/s. ACC ltd. Beside the invoice, the notice is not issuing any document like 'consignment note', etc. The notice is not paying Service Tax on this income. 2.5 The Revenue felt that since the assessee provided the services of movement in specialized containers/wagons, unloading, stocking, and dispatch of the cement on behalf of their clients, the services provided by the noticees would therefore fall within the definition under Section 65(25) of ....
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....f wagons to clients other than M/s AC Ltd. (amount collected termed as 'reimbursement of primary freight'); (c) Effecting delivery of cement to the client's places from assessee's unit at Kalamboli (amount collected termed as 'reimbursement of secondary freight'); (d) providing storage and handling of Bulk Cement (charges received are termed as 'Handling charges income'); are integral and inseparable activities of Clearing & Forwarding Agent's Service being provided by them. However, these were used as colourable devices, by them to suppress their Service Tax liability with an intention to avoid correct tax payment. 2.6 A show cause notice dated 13.10.2006 was issued to BCCL for the period April 20001 to March 2006 demanding service tax of Rs. 3,18,86,928/-. The break up of the demand was Rs. 3,06,21,823/- towards Freight Rebate, Primary Freight reimbursement, Secondary Freight reimbursement and Rs. 12,65,105/- towards recovery of Facility Charges. 2.7 The adjudicating authority in his Order-in-Original dropped the demand of service tax on Freight rebate, Primary & Secondary Freight reimbursement, however, upheld the service tax deman....
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....alance 22.5% to the Respondent. 5.4 The rail freight portion of 22.5% so received from ACC Ltd. is purely in the nature of rebate or subsidy received from Indian Railways on account of Respondent having invested in 125 wagons. This amount is not due by ACC Ltd. to the Respondent for any contractual obligation of service between ACC Ltd and Respondent. The said amount is in the form of rebate for Respondent's investment in wagons and is due from Indian Railways to the Respondent and not towards C&F services. To be eligible to receive this amount the Respondent is not required to carry out any C&F function. The C&F activity of Respondent commences only after receiving the goods at the warehouse at Kalamboli. 5.5 The grounds of appeal raised by the Revenue does not bring out in any manner as to how the freight rebate received by the Respondent is connected with clearing and forwarding operations and in fact admits that the said amount is received as freight rebate. 5.6 With respect to Primary freight reimbursement the Learned Counsel for the Respondent makes the following submissions: 5.7 Primary freight reimbursement is similar to freight rebate received by the Respon....
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....ied out by them and therefore the said charges cannot be held to be liable to service tax under C&F category. 7.4 He further submitted that demand could not have been raised invoking extended period of limitation, since assessement for the period 2001-02 and 2002-03 was already completed by the Department, evidence of which is enclosed with the Appeal memorandum. Further it can be seen from the letter dated 4.3.2004 issued to the Appellant that at the time of scrutiny it is stated that agreements with ACC Ltd were verified by the Department which specifically mentions about facility charges being recovered by them. Further, facility charges were recovered on which service tax is paid and assessed by the Department under the same Debit Note by which handling charges were recovered. Thus, Department would not have ignored the facility charges being recovered by the assessee- Appeallant. 7.5 Since the issue involved is of interpretation of law, Appellant cannot be said to have acted mala fide with an intention to evade payment of tax. 7.6 In view of the above, assessee-Appellants cannot be said to have suppressed the facts since all the information was within the knowledge of....