TaxTMI 
TaxTMI 
2023 (9) TMI 21
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....he allegations made in the show cause notice both on merits and limitations? 2. Whether the Tribunal was right in dismissing the Rectification of Mistake Application in cursory manner without discussing various judgments cited by the Appellant which are squarely applicable to the facts of the present case and without considering written submission filed post hearing? 3. Whether the Tribunal was correct in not considering the decision of the coordinate bench in the case of Chahabria Marketing Ltd. V. Commissioner of Service Tax, Mumbai reported as 2016(43) STR 93 which holds that exemption under Notification No. 13/2003-ST dated 20.06.2003 is available to all services provided under Business Auxiliary Service? 4. Whether the Tribunal was correct in restricting the scope of exemption under Notification No. 13/2003-ST dated 20.06.2003 to the subcategory of promotion and marketing of "Business Auxiliary Services" and not the entirety of "Business Auxiliary Services"? 5. Whether the Tribunal was correct in holding that services in the nature of "veterinary services" and "Technical Testing services" will fall under the taxable category of "Business Aux....
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....passed by the CESTAT preferred R.O.M. Application under Section 74 of the Finance Act 1994 being Application No. ST/ROM/92261/17, on such application on 20 April, 2017, hearing was held before the CESTAT. By its order dated 5 May, 2017, passed by the CESTAT, the ROM was disposed of confirming the demand in respect of services provided to customers of Venco/VRB. Penalty imposed under Section 78 was upheld and no penalty was imposed under Section 76. 10. Being dissatisfied with the Order passed by CESTAT on the ROM and the Order-in-Original passed by the Commissioner, Central Excise Pune-III, the Appellant has filed the present Central Excise Appeal under Section 83 of the Finance Act 1994 r/w Section 35 G of Central Excise Act. 11. The primary contention as raised by the Appellant is to the effect that the Order-in-Original to the extent it confirms the Service Tax demand on the Appellant limited to the quantum of services provided to customers of Venco/VRB, under the taxable category of business auxiliary services along with interest is illegal, without any basis, without jurisdiction and bad in law. It is contended that the findings of the Tribunal are legally as well as fac....
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....heva reported in 2017 (349) ELT 203 (SC) vii. Commissioner of Central Excise, Ludhiana V. Dr. La Path Lab (P) Ltd. reported in 2007 (8) STR 337 12.2. Mr. Motwani further submitted that in view of the law as laid down by the Supreme Court and the High Courts is to the effect that Notification No. 13/2003 exemption applies to all Business Auxiliary Services, provided by a 'Commission Agent', he prayed that the impugned orders be set aside and Appeal be allowed with cost. 13. On the other hand, Mr. Ram Ochani with Mr. Karan Adik, learned Advocates for the Respondent submitted that Appellant has wrongly claimed exemption under Notification No. 13/2003 for the period from July 2003 to September 2004 in relation to Veterinary Services and Testing and Analysis Services. It is submitted that the Authorities cited on behalf of the Appellant would not assist the Appellant. It is submitted that there are concurrent findings recorded in the Order-in-Original by the CESTAT, as also by the CESTAT in rejecting the ROM dated 5 May, 2017. It is hence submitted that the Appeal does not give rise to any substantial Questions of Law hence it should be dismissed. Analysis and Conclusi....
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.... 127 where at page 131 of the report, this court observed that in order to sustain an order of the Tribunal beyond a period of six months and up to a period of 5 years in view of the proviso sub-section (1) of Section 11-A of the Act, it had to be established that the duty of excise had not been levied or paid of short-levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or willful mis-statement or suppression of facts or contravention of any provision of the Act or Rules made there under, with intent to evade payment of duty. It was observed by this Court that something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability beyond the period of six months had to be established. Whether in a particular set of facts and circumstances there was any fraud or collusion or willful misstatement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case. The Tribunal, however, had held contrary ....
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....ification No. 55/75 and therefore, the appellants were obliged to take out a licence. The failure to take out the licence and thereafter to take the goods out of the factory gate without payment of duty was itself sufficient, according to Shri Ganguly, to infer that the appellants came within the mischief of Section 11-A of the Act. We are unable to accept this position canvassed on behalf of the revenue. As mentioned hereinbefore, mere failure or negligence on the part of the producer or manufacturer either not to take out a licence in case where there was scope for doubt as to whether licence was required to be taken out or where there was scope for doubt whether goods were dutiable or not, would not attract Section 11-A of the Act. [Emphasis Supplied] In the present proceeding Show Cause Notice dated 15 April, 2009, was issued for the period of 1 July, 2003 to September, 2004. Thus, the Judgment of Padmini Products squarely applies to the facts of the present proceedings. In our opinion the Respondent failed to prove that there was suppression on the part of Appellants as during the period from July 2003 to September 2004, the Appellant had claimed exemption under th....
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....ith the Court in rejecting his claim and also causes impediments in his taking adequate and appropriate grounds before the higher Court in the event of challenge to that judgment. Now, we may refer to certain judgments of this Court as well as of the High Courts which have taken this view. 17.3. A Division Bench of this Court in Electropneumatics (Supra) held that minimum expectation from tribunal was complete application of mind to controversy dealing with submissions canvassed orally and in writing and by reasoned order whether to uphold or reject them. The proceedings were remanded back to the tribunal so as grant to the assessee on opportunity to argue its case completely. It was observed that it was not possible to ascertain from tribunal's order as to which of contentions have been dealt with and considered. Paragraph 8 of the said judgment reads as under:- "8. To our mind, the Tribunal was required to consider the issues raised in the appeal in-depth and render a complete finding. If a particular issue was pressed or was given up that should be indicated in the order of the Tribunal. We would expect the Tribunal, which is manned by both judicial and technical exp....
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....tillers upto collection of sale proceeds. The Commissioner proceeds on the premise that the benefit of the exemption is available to a 'commission agent' who provides services 'only' in respect of sale or purchase of goods. In our view, this is an incorrect reading of the Notification as the exemption under this Notification applies to all Business auxiliary services provided by a 'commission agent, and not merely to the services of selling or purchasing goods on behalf of the client. No doubt a commission agent as defined under this Notification is a person who provides service in relation to purchase or sale of goods, this is only for defining the eligibility criterion and is relevant only for determining whether or not an assessee claiming the benefit of this Notification is a 'commission agent' or not. Once it is held that the assessee is a 'commission agent' by virtue of being engaged in the activity of causing sale or purchase for a consideration which is linked to the quantum of sale or purchase, the benefit of this Notification will cover all business auxiliary services rendered by such a 'commission agent'. The activities which a....
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....y the assessee in the present case wherein the issue of classification of Imaging Plates, IP Cassettes was alone contested. 5. In the impugned order, the learned Tribunal did not accept the decision of the coordinate Bench in Jindal Photo India Pvt. Ltd (supra) and took the view that the two items were more appropriately classifiable under Chapter 37 CTH 3701 10. 6. As benefit under the Notification No. 21/2002-Cus., dated 1-3-2002 was allowable in respect of Imaging Plates and IP Cassettes even if the same is to be classified under Chapter 37, the learned Tribunal, by the impugned order, held that the said two items will be eligible to the benefit of Notification No. 21/2002, dated 1-3-2002. 7. Notwithstanding the above, as the appellant-assessee would be liable for payment of additional duty of customs by virtue of the notification under Serial No. 357B, the present appeal has been filed. 8. If the learned Tribunal was not in a position to accept the correctness of the decision of a coordinate Bench of Jindal Photo India Pvt. Ltd. (supra), the correct course of action would have been to seek the views of a Larger Bench. Judicial discipline dema....
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....w in Central Excise Appeal No. 11/2014, about confusion about nature of activity, i.e. cargo handling or transporter and its impact, the department has raised one more question and that question reads as under : of limitation under Section 73(1) of the Finance Act, 1994? "Whether the CESTAT in facts and circumstances of the case is justified in reversing the invocation of extended period". 12. Again, after hearing Learned Counsel for the parties, we find that the very confusion claimed by Assessee is being relied upon by the department to seek extended period of limitation. Perusal of the impugned order reveals that in paragraph No. 6.8, CESTAT has referred to problems faced at infancy stage of implementation and confusion then prevailing. Benefit thereof is given to the Assessee and is declined to department. This common order dated 23-11- 2011 in ST Appeal Nos. 166-167 of 2008, is questioned in Central Excise Appeal Nos. 7/2012 and 4/2015. In other appeals, impact of "confusion" about nature of activity undertaken is already directed to be looked into and matters are remanded back. If claim of assessee, that service tax is paid on transportation charges is incor....
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.... decisions of the Tribunal then we would certainly exercise our writ jurisdiction. Merely stating that the earlier judgments would not be applicable, without more, would not meet the requirement of an order with reasons. [Emphasis supplied] 18.6 On behalf of the Revenue, we are not pointed out any reason as to why the decision in Chahabria Marketing (Supra) as referred by the CESTAT in the notification in question, would not be applicable in the appellant's case so as to grant the benefit of the exemption for the period covered by the Show Cause Notice. The tribunal thus has erred in not considering that the issue was covered by the decision of Chahabria Marketing (Supra). For such reasons, we answer the Third Question of Law in favour of Appellant, and hold that the exemption benefits as per Notification No. 13/2003, is available to the services provided under "Business Auxiliary Services" for the period in question. 19. In so far as the Fourth Question of Law is concerned, namely, "Whether the Tribunal was correct in restricting the scope of exemption under Notification No. 13/2003-ST dated 20.06.2003 to the sub-category of promotion and marketing of "Business Auxi....
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....at the Appellant is a commission agent of Venco/VRB, any service provided to them which falls under the definition of business auxillary services will be exempt from Service Tax prior to 9 July, 2004. Therefore the Appellant is entitled to the benefit of the said notification No. 13/2003 during the period in dispute and therefore the demand is unsustainable. 19.6 The Supreme Court in Federal Bank (Supra) held that Section 65(12) of the Act covers all charging services rendered by banks and hence by express provisions in the same very section, cash management services stood excluded from the purview of service tax. On account of such exclusion the authorities cannot levy service tax by indirect method of charging the same services under the head "business auxiliary service". The Paragraphs 11 & 12 of the Judgment read as under:- "11. In that view of the matter, the High Court held that Clause (12) of Section 65 covers all charging services rendered by the Banks. The High Court is further of the view that when cash management services stood excluded from the purview of service tax at the hands of the Bank until 31-5-2007, the authorities cannot levy service tax on an acti....
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...." when at the relevant point of time the testing services on animals were specifically excluded from the definition of 'Technical Testing services'." 20.1 The Appellant claims that it was raising invoices, for its commission on Venco and VRB based on the total sales made by Venco and VRB. According to Appellant, Services relating to veterinary services and laboratory analysis and testing services provided by the Appellant were incidental to the main service of promotion and marketing service and the commission agent service provided by the Appellant to Venco and VRB. With Effect from July 9, 2004, the appellant voluntarily obtained Service tax registration under the category of business auxiliary service, and started paying Service tax on the entire commission received by it from Venco and VRB for providing such services. The Service tax was paid by the Appellant under the category of commission agents and the same has been accepted by the Department. This clearly showed that veterinary services and laboratory analysis and testing services provided by the Appellant as a commission agent, was a part of the service of promotion and marketing. 20.2 Appellant has submitted that t....
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....nostic services, specialized laboratory examinations, analysis of feed and feed ingredients and water related tests. 20.6 The Appellant also relies on the definition of "animal" to support its contention that the products in question are duly excluded from the definition of technical testing and analysis as provided in the explanation to Section 65(106). 20.7 The definition of animal as provided in Oxford Advanced Learners Dictionary is as follows: "any living thing that is not a plant or a human", So also, Black Law Dictionary, defines "animal" as:- "Any living creature other than a human being". In the present proceedings the issue is whether Veterinary Services and Pathological laboratory Testing of chicks, will fall into 'Business Auxiliary Services', therefore, Sub-section (106) of Section 65, cannot be read so as to exclude 'chicks'. We are thus of the opinion that sub-section (106) of Section 65, would include poultry (chicks) also. Therefore, chicks being animals are specifically carved out of the ambit of Service tax in relation to technical testing and laboratory and analysis services. 20.8 Services of testing and analysis in relation to a....
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.... is unassailable and deserves to be upheld. 20.10 The Supreme Court in A. V. Fernandez vs. The State of Kerala reported in AIR 1957 SC 657 held as follows:- "5. Tax can be charged only if the activity sought to be taxed falls squarely within the taxing entry a tax cannot be imposed by presumption, inference or conjecture, but must be imposed only as per the specific language of the taxing entry; each word used in a taxing provision must be given effect to." 20.11 We therefore answer Fifth Question of law in favour of Appellant to hold that at relevant time the services in the nature of 'Veterinary Services' and 'Technical and Laboratory Testing Services' did not fall under taxable category of Business Auxiliary Services. 21. The Supreme Court of India in the case of Pratibha Processors vs. Union of India [1996 (88) ELT 12 (SC)] has held that the "interest" payable under Section 61(1)(2) of the Act is a mere "accessory" of the principal and if the principal is not recoverable/payable, so is the interest on it. This is a basic principle flowing from the language of Section 61(1)(2) of the Act. The principal amount herein is the amount of duty payable on clearance of....