Natural Petrochemicals Pvt Ltd Vs C.C.E. & S.T.-Rajkot (CESTAT Ahmedabad)
The CESTAT, Ahmedabad in the case of M/s. Natural Petrochemicals Private Limited vs. C.C.E & S.T, Rajkot [Final Order No. A/12059/2023 dated September 18, 2023] has ruled that the assessee was aware of the chargeability of service tax upon the commission received under the head of Business Ancillary Services (BAS) and had deliberately never disclosed the same in the monthly returns, thus the financial hardship faced by the assessee is no ground for non-payment of Service Tax, hence dismissed the appeal.
Facts:
M/s. Natural Petrochemicals Private Limited (Appellant) is engaged in providing services of the Goods Transport Agency (GTA) and BAS.
Upon Investigation, the Commissioner of Central Excise and Service Tax (Respondent) found that the Appellant had received a commission income from M/s Gopal Enterprise and M/s Galaxy Enterprise amounting to Rs. 78,08,192/- and Rs. 5,30,085/- respectively. Thereby, the Appellant was inquired about the chargeability of Service Tax on the said commission received under the head of BAS.
The Respondent issued a Show Cause Notice (“the SCN”) demanding service tax for the income received from the Appellant. The Commissioners (Appeal) vide order OIA-RJT-EXCUS-000-APP-164-14-15 dated August 28, 2014 (“the Impugned Order”), confirmed the demand along with the penalty under Section 78 of the Finance Act, 1994 (“the Finance Act”).
Aggrieved by the Impugned Order, the Appellant filed the appeal before CESTAT, Ahmedabad.
The Appellant contended that they had furnished all the details related to the transactions in their financial statement showing no intention of the Appellant for evading service tax. Appellant further contended that due to financial hardship, the Appellant was unable to pay service tax. Further, the Appellant contended that BAS was taxable from July 01, 2003, but got exempted till July 09, 2004 vide Notification No. 13/2003-ST dated June 20, 2003.
The Respondent contended that the Appellant never disclosed that income under monthly returns and never had an intention to do so. The Respondent further contended that if according to the Appellant the said income was exempted, still the Appellant is required to declare the same in their monthly returns.
Issue:
Whether the Appellant is liable to pay service tax on the commission received under BAS?
Held:
The CESTAT, Ahmedabad in Final Order No. A/12059/2023 held as under:
