TaxTMI 
TaxTMI 
2019 (8) TMI 322
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.... from M/s Pearl Logistics Services under proviso (1) of Section 73 of the Finance Act, 1994 read with section 68 of the Act and Rule 6 of the Service Tax Rules, 1994 as amended. b. Interest on the amount of demand determined at 'a)' at the appropriate rate should be paid by M/s Pearl Logistics Services under Section 75 of the Act; 45.a. I impose a penalty of Rs. 2,03,12,586/- (Rupees Two Crore Three Lakhs Twelve Thousand Eight Hundred and Nine Only) on M/s Pearl Logistics Services under provisions of Section 78 of the Finance Act, 1994. b. for the period prior to 16.05.2008, I also impose a penalty under Section 76 of the Finance Act, 1994 on M/s Pearl Logistics Services as follows: i) from Oct'03 to 09.09.2004: imposed a penalty of Rs. 200/- for every day. ii) from 10.04.2006 to 17.04.2006: '...... a penalty of one hundred rupees for every day which such failure continues, however, the penalty under the clause shall not exceed the amount of service tax that he failed to pay.' iii) from 18.04.2006 to 15.05.2008: '...... a penalty of two hundred rupees for every day or at rate of two percent of such tax per month, whichever is hi....
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....riate interest on the amount of ST, being assessed should not be recovered from them at applicable rate(s) under section 75 of the said Act. vi) Penalty as provided for under section 76 of the said Act should not be imposed on them; vii) The penalty for contravention of any provision of the said Act or any rule made there under should not be imposed on them as provided for under section 77 of the said Act; viii) The penalty for suppressing the value of taxable services with an intent to evade payment of ST should not be imposed on them as provided for under section 78 of the said Act; ii. dated 22.04.2010 was issued on the same grounds demanding service tax of Rs. 13,25,809/- covering the period from October 2008 to September 2009. 2.2 Both the show cause notices have been adjudicated by the Commissioner as per the impugned order referred in para 1, supra. 2.3 Aggrieved by the order of Commissioner, appellants have preferred this appeal. 3.1 Appellants have in their appeal challenged the impugned order on following grounds- • They had on the invoices shown handling and transportation charges separately and thus were entitled for e....
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.... • Import cargo handling • Export cargo handling • Mere transportation of empty and stuffed containers. • They had submitted the said trifurcation duly supported by the certificate from the Chartered Accountant. On the basis of the Chartered Accountant Certificate commissioner has given the relief in respect of Export Cargo handling and dropped the demand of Rs. 30,22,382/- relatable to Export Cargo Handling. However he has not extended the same benefit in respect of Pure transportation of containers containing import cargo without involving provision of cargo handling services and only transportation and handling of empty containers. • Commissioner has failed to give the benefit of cum tax value while confirming the demand against them in respect of cargo handling services. Contrary to decision of tribunal in case of Advantage Media Consultant [2008 (10) STR 449 (T-Kol)]. He has extended the said benefit in respect of • Their submissions on limitation have not been considered by the Commissioner and no justification given by the Commissioner for invoking extended period of limitation. They rely on the decis....
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....lties under Section 76 and 78 can be imposed simultaneously [Gondwana Engineers Ltd [2018-TIOL-3847-CESTAT-Mum] • Since during the relevant period appellants had not been filing the ST-3 return and not declaring the details of services provided by them in the manner prescribed extended period of limitation has been rightly invoked. [Star India Pvt Ltd [2015 (38) STR 884 (T-Mum)] 5.1 We have considered the impugned order along with the submissions made in appeal and during the course of hearing of appeal. 5.2 Appellants do not dispute with regards to levy of service tax in respect of taxable services rendered by them under the taxable category of "Cargo Handling Services" for the import cargo. However the dispute is in manner of calculation of taxable value for such services. Relying on the definition of Cargo handling Services and various clarifications issued by the Board they contest inclusion of following amounts charged by them in the value of taxable services provided by them:- i. Towards mere transportation of containers containing import cargo without involving provision of cargo handling services. (Rs. 6,61,86,181/-) ii. Towards transpor....
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....r No As per DGCEI Bill Amount Export Import cargo handling Charges (Taxable Value) ST Rate S Tax 1 01.10.03 to 31.03.04 16014125 16009527 15125297 884230 8.00 70738 2 01.04.04 to 09.09.04 5801427 15800062 11203520 4596542 8.00 367723 3 10.09.04 to 31.03.05 30491426 30818831 1312575 29506256 10.20 3009638 4 01.04.05 to 30.09.05 28101397 30845935 0 30845935 10.20 3146285 5 01.10.05 to 31.03.06 38924876 37604188 0 37604188 10.20 3835627 6 01.04.06 to 17.04.06 10773542 2845058 0 2845058 10.20 290196 7 18.04.06 to 30.09.06 31189718 34571569 0 34571569 12.24 4231560 8 01.10.06 to 31.03.07 17889348 21818071 7168078 14455494 12.24 1769352 9 01.04.07 to 10.05.07 1436636 1987427 0 1987427 12.24 243261 10 11.05.07 to 30.09.07 6686160 5552452 0 5552452 12.36 686283 11 01.10.07 to 31.03.08 8213121 6831401 0 6831401 12.36 844361 12 01.04.08 to 30.09.08 4862663 5411731 0 5368954 12.36 6....
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....itable types of road vehicles in good working condition for transportation of containers at JNPT/NSICT, Container Yard when required, and take over the loaded containers placed on such road vehicles by JNPT/NSICT operators after due inspection of locks/seals and the condition of the container and on completion of all other formalities including preparation of EIR (Equipment Interchange Report). (Where a container has been found damaged or with seals/locks tampered or whose contents appear to have been damaged shall be taken over from the JNPT/NSICT operators only after following the procedure laid down). On intimation about the arrival of containers at JNPT/NSICT Yard after issue of a job order, the contractor shall make available the required number of vehicles and shall arrange taking over of the containers from the JNPT/NSICT and transport the same to CFS/Multipurpose Warehousing Complex. Any demurrage/wharfage that may occur on account of the failure of the contractor to provide the vehicles. and taking over the containers will be his liability. The contractor shall provide transport facilities to the customs officials, wherever, it becomes necessary to move the contai....
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....om the JNPTINSICT and transport the same to Multipurpose Warehousing Complex. Any demurrage/wharfage that may occur on account of the failure of the contractor to provide the vehicles and taking over the containers will be his liability. The contractor shall provide transport facilities to the customs officials, wherever, it becomes necessary to move the container under custom escort, no extra remuneration is payable to the contractor. On reaching the Multipurpose Warehousing Complex, the contractor shall hand over the container to the Multipurpose Warehousing Complex authorities duly satisfying the condition of the seals, and locks of the container as shown in the Equipment Interchange Report and arrange for immediate de-stuffing of the container or after grounding, as the need be, in the presence of customs, shipping lines/agents and under the supervision of Multipurpose Warehousing Complex officials after following the prescribed procedure at the designated point. The container shall be de-stuffed within two clear working shins excluding the shift of arrival failing which the penalty as deemed fit (minimum penal charges shall be equivalent to one week grid charges as pe....
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....rehousing Complex Regional Manager,/Custom authorities, the contractor shall arrange the grounding, wherever necessary, of the import loaded containers from the road vehicles at the required location within complex and stack these up to three high by means of suitable equipment without damaging the container or its contents. The contractor shall complete the work of transportation of import loaded containers within 24 hours of the date and time of issue of job order irrespective of any detention due to offloading/loading delays or traffic congestion en-route. The contractor shall be required to transport a minimum of 100 TEUs (One Hundred TEUs) of import loaded containers in a day from the JNPT/NSICT Container Yard to the Multipurpose Warehousing Complex, CWC, Sector-7, D. Node or the number of container pending for movement which ever is lower The Regional Manager, Jawaharlal Nehru Port, Navi Mumbai reserves the right to impose a penalty, Rs. 200/- per TEU/Per day including consequential damages on the contractor plus ground rent of a loaded container on TEU basis on the highest slab of the tariff applicable to the trade against the quantity of such containers fall short ....
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....nd binding on the contractor in this regard. 3(a) The contractor shall arrange de-stuffing of the loaded containers stacked in the open yard by grounding these from any of the three heights, wherever necessary, for facilitating customs examination in the presence and under supervision of customs officials, shipping lines/agents and Central Warehousing Corporation Officials, and stuffing it back in to the same or other container and/or loading of the cargo on to the road vehicles provided the importer/CHAISA provided at the Multipurpose Warehousing Complex. The container shall be de-stuffed in a manner which does not cause damage to the container or its cargo and this operation shall be performed to the satisfaction of the Container Freight Station authorities. The loaded/empty container, as the case may be, shall have to be stacked in the Container Yard of Multipurpose Warehousing Complex up to three high. The contractor shall ensure deliveries/destuffing of all the containers for which the issue slips are given for a particular day failing which the penalty of Rs. 200/- per TEU per day including the. amount equivalent to consequential damages shall be imposed by the Regio....
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....tuffed shall be inventoried /segregated and neatly arranged consignment-wise in the nominated stack/grid, to tally with the OBL/IGM/Packing List/Invoice and other relevant documents. The cargo, thereafter shall be stacked in the import cargo unit/open yard by using appropriate handling equipment. The empty container after de-stuffing shall be shifted to the Empty Container Yard or any other location in the Complex and stacked up to three high. 4(a) The contractor shall provide suitable types of mechanical equipment for de-stuffing the container or after grounding or after retrieval of loaded container (which may include transportation within the complex) as the need he, in the presence of customs, shipping; lines/agents and under the supervision of Multipurpose Warehousing Complex officials, after following prescribed procedure. On completion of all the laid down formalities, all the containers decided to be destuffed shall be got de-stuffed immediately. The contractor shall be responsible for any delay in getting these containers de-stuffed. The Regional Manager, Multipurpose Warehousing Complex, Dronagiri Node, Sector-7, Navi Mumbai reserves the right to impose penalty o....
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....ply to show cause notice appellants have themselves stated as follows: "8.1.2 Kind attention of your honour to the definition of cargo handling services wherein it specifically excludes the mere transportation of goods. Central Board of excise and Customs vide its letter, issued under F No B11/1/2002-TRU dated 1.08.2002, issue instructions an clarification regarding tax on 10 new services issued by the Finance Act, 2002, specifically clarified that there shall be no levy of service tax on transport charges under cargo handling services. Moreover at the time of negotiation of rates with M/s CWC, M/s CWC had himself provided us break up of transport charges and handling charges. According which Rs. 695/- is the transport cost and Rs. 555/- is handling charges. According to the instructions of M/s CWC, we have bifurcated the amount of transport and handling charges. The necessary working of the transport and handling cost is available with M/s CWC. We time and again requested the officials of Ms/ CWC to provide us the said break up but the failed to provide the same. Lastly, on 31.01.2014 (annexed as Annexure "H") we have made written communication to Regional Manager, M/s CW....
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....f domestic cargo only are liable to tax. Event of levy arises when service relating to or in relation to handling of cargo is provided by a cargo handling agency irrespective of mode of transport used for movement of such cargo. Precisely, following activities which are contemplated to be taxed as cargo handling service are : (1) By express terms : (A) Loading, unloading, packing or unpacking of cargo; (2) By inclusive terms : (B) Handling service relating to cargo : (i) Provided for freight in special containers or for non-containerised freight; (ii) Provided by a container freight terminal or, by any other freight terminal; and (3) Cargo handling service provided which is incidental to freight. 16. What that appears to be necessity of law for taxation under the class cargo handling service is that the service provided should be relating to or in relation to cargo handling by a cargo handling agency. The service provided should be integrally or inseparably connected with handling of cargo or attributable thereto without being a mere activity of transportation of such cargo since transport service independent o....
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....Board Circular dated 1-8-2002 is no help to them. Appeal is dismissed." In case of Gangadhar Bulk Movers Pvt Ltd [2012 (27) ST 258 (T-Mum)] tribunal held as follows: "6.2 Section 65(105)(zr) of the Act declared cargo handling service to be "taxable service" w.e.f. 16-8-2002. For better appreciation the relevant provisions are extracted hereunder : .......... A conjoint reading of provisions of Section 65(105)(zr) and 65(23) of the Act show that cargo handling agencies are taxable entities. Cargo handling services provided by such entities attract the levy of service tax. Section 65(23) has a wide amplitude and has brought all like nature activities to its fold expressly and by inclusion of such like nature activities under the class 'cargo handling services'. However classification of service under this category is subject to two exceptions/exclusions: viz. : (1) handling of export cargo or passenger baggage and (2) mere transportation of goods. These two activities are beyond the scope of such class from taxation for rationale behind them. Accordingly, cargo handling services provided in respect of domestic cargo only are liable to tax. Event of levy ....
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....r has discharged the tax liability, this very same issue was considered by a larger bench of this Tribunal in the case Vijay Sharma & Co. [2010 (20) S.T.R. 309 (Tri.-LB)]. In the said case, it was held that - "The scheme of service tax law suggests that it is a single point tax law without being a multiple taxation legislation. In the absence of any statutory provision to the contrary, providing of service being event of levy, self-same service provided shall not be doubly taxable. If service tax is paid by a sub-broker in respect of same taxable service provided by the stock broker, the stock broker is entitled to the credit of the tax so paid on such service if entire chain of identity of sub-broker and stock broker is established and transactions are provided to be one and the same...." This decision was followed by another co-ordinate bench of this Tribunal in SEW Construction Ltd. case [2011 (22) S.T.R. 666 (Tri.-Del.)] wherein it was held that - "We do not find any provision in the Finance Act, 1994 to grant immunity to the sub-contractor from levy of service tax when undisputedly taxable services were provided by them. ......" Therefore, t....
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....one subsequent to visit of the officers of DGCEI, Mumbai in November'06; that as regards to payment of service tax for the period from April 07 to Sepetmeber'08 in respect of the above two companies, he stated that they had not paid the service tax and had not filed the ST-3 returns for the said period; on being asked, he stated that during the period April 07 to September 08 though they had collected appropriate service tax from their customers they could not deposit in the Government account for which he had no comments offer at this juncture; that as regards the data and copies of ST-3 returns as called for vide Summons dated 06.01.09, he stated that since they had not filed the ST-3 returns they could not produce the same....." 5.10 From the facts as stated above it is quite evident that appellants were charging the service tax from their customer and not depositing the same with the government. They were also not filing the Service Tax returns even after knowing about their liability for the same. Thus in our view extended period of limitation is applicable in the facts and circumstances of this case. In case of Capital Transport Convoy Contractor [2016 (41) STR 651 (T-Del)....
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....Section 73(1) ibid. Therefore, the contention of the appellant that demand is time-barred in respect of the impugned order in appeal dated 25-2-2013 is not sustainable." Same view has been expressed by the tribunal in case of Star India Pvt Ltd [2015 (38) STR 884 (T-Mum)] "5.15 The next issue for consideration is the time-bar aspect. The contention of the appellant since is that they were only required to declare the consideration received in the ST-3 return and in the case of foreign advertisers the consideration was paid directly to Star Hong Kong, there cannot be any misdeclaration on their part. This contention is obviously wrong. In the ST-3 return, there was a column wherein the appellant was required to declare the amount charged to the service recipient, apart from the amount received. As per the agreement, dated 1-4-1999, SIPL was appointed as non-exclusive independent representative in the territory of India to solicit television advertising for the channels, namely, Channel V, Star World, Star Plus, Star News, Star Movies and such other channels as may be added in future and to collect and remit advertisement charges. The responsibility also included delivery....
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....hich has not been levied or paid, or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion, wilful misstatement, suppression of facts, etc., period of service of notice on the person chargeable with such duty would be five years instead of one year provided in normal circumstances. Nowhere does this provision refer to the period of service of notice after fraud, collusion, wilful misstatement or suppression, etc., comes to the knowledge of the Department. In simple terms, the Department could recover unpaid duty up to a period of five years anterior to the date of service of notice when the case falls under proviso to sub-section (1) and such omission is on account of fraud, collusion, wilful misstatement, etc." Thus in our considered view, the invocation of extended period of time for confirmation of demand is fully justified and we hold accordingly." Hence we uphold the impugned order for invoking extended period of limitation. 5.11 Since the demand of tax has been upheld the demand for interest will follow. It is now settled law that interest under Section 75, is for delay in the payment of tax from the date when it was due. Sin....
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.... c) Pepsi Cola Marketing Co [2007 (8) STR 246 (T-Ahd)] d) Ballarpur Industries Limited [2007 (5) STR 197 (T-Mum)] Thus we uphold the demand of interest made under Section 75 of the Finance Act, 1994. 5.12 It is now settled position in law that penalty under section 78 can be imposed only if the ingredients specified in the said section are present. The ingredients specified for invoking the Section 78 are identical to those specified for invoking the extended period of limitation as provided by Section 73 ibid. Since in respect of show cause notice, we hold that demand could have been made by invoking the extended period of limitation as provided by Section 73, we uphold the penalties imposed under Section 78 of The Finance Act, 1994. Hon'ble Supreme Court has in case of Rajasthan Spinning and Weaving Mills [2009 (238) ELT 3 (SC)] held as follows: "23. The decision in Dharamendra Textile must, therefore, be understood to mean that though the application of Section 11AC would depend upon the existence or otherwise of the conditions expressly stated in the section, once the section is applicable in a case the concerned authority would have no discretion ....
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.... a criminal sentence. There can be no dispute that having regard to the provisions of Section 276C, which speaks of wilful failure on the part of the defaulter and taking into consideration the nature of the penalty, which is punitive, no sentence can be imposed under that provision unless the element of mensrea is established. In most cases of criminal liability, the intention of the Legislature is that the penalty should serve as a deterrent. The creation of an offence by Statute proceeds on the assumption that society suffers injury by and the act or omission of the defaulter and that a deterrent must be imposed to discourage the repetition of the offence. In the case of a proceeding under Section 271(1)(a), however, it seems that the intention of the legislature is to emphasise the fact of loss of Revenue and to provide a remedy for such loss, although no doubt an element of coercion is present in the penalty. In this connection the terms in which the penalty falls to be measured is significant. Unless there is something in the language of the statute indicating the need to establish the element of mens rea it is generally sufficient to prove that a default in complying with th....
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....s under S. 80 of the Finance Act, the appropriate authority could have decided not to impose penalty on the assessee if the assessee proved that there was reasonable cause for the said failure in respect of one or both of the offences. However, no circumstances are either pleaded or proved for invocation of the said Section also. In any event we are not satisfied that an assessee who is guilty of suppression deserves such sympathy. As such, we are of opinion that the learned Single Judge was not correct in directing the 1st appellant to modify the demand withdrawing penalty under S. 76. Therefore, the judgment of the learned Single Judge, to the extent it directs the first appellant to modify Ext. P1 by withdrawing penalty levied under S. 76, is liable to be set aside and we do so. The cumulative result of the above findings would be that the Writ Petitions are liable to be dismissed and we do so. However, we do not make any order as to costs." Same view was again expressed by Kerala High Court in case of Lawson Travel and Tours (I)(P) Ltd [2015 (37) ELT 183 (Ker)] as follows: "5. What we notice is, the liability to pay Service Tax is in accordance with the Finance Act,....