Sarvan Kumar S/o Inder Singh Vs CCE-Rohtak (CESTAT Chandigarh)
Conclusion: Demand of service tax for the period from 1st April 2003 to March 2005 was prima facie wrong because appellant had started rendering services to M/s IBP Co. Ltd. from 01.09.2005 as was clear from the agreement dated 01.09.2005 which had been accepted in the order-in-original. Invoking the extended period of limitation was not justified simply on the ground that there was no payment of tax and no return was filed Further, appellant was entitled to SSI exemption for the period 2005-2006 because their turnover was less than 4.00 lacs in that financial year which entitled them for SSI exemption in terms of Notification No. 06/2005-ST dated 01.03.2005..
Held: Appellant was engaged in maintenance & handling of corporation owned and contractor operated (COCO) retail outlet site of M/s Indo British Petroleum Ltd., Panipat at Hisar from where petroleum products, mainly motor spirit and High-Speed Diesel were sold. Revenue has entertained a view that the appellant was evading service tax which they were liable to pay under Business Auxiliary Service as commission agent as cited in Explanation (a) to clause (vii) of Business Auxiliary Service defined under Section 65(19) of the Act. Department invoked the extended period of limitation alleging suppression on the part of the appellant. A show cause notice was issued to appellant which was strongly contested by Respondent by filing the appeal. It was held that the demand of service tax for the period from 1st April 2003 to March 2005 was prima facie wrong because the appellant had started rendering services to M/s IBP Co. Ltd. from 01.09.2005 as was clear from the agreement dated 01.09.2005 which had been accepted in the order-in-original. Further, appellant was entitled to SSI exemption for the period 2005-2006 because their turnover was less than 4.00 lacs in that financial year which entitled them for SSI exemption in terms of Notification No. 06/2005-ST dated 01.03.2005.. In the case of Commissioner of Central Excise, Chandigarh vs. Loan Zone cited (supra) wherein identical facts were involved and it was held that the service was not provided to independent persons but to service recipient who was itself brand name owner. The charges received by appellant from M/s IBP Co. Ltd. were duly reflected in ITR filed by appellant which showed that there was no intention to evade and moreover the issue of services provided by commercial concern and individual in Business Auxiliary Service was in dispute and lot of confusion was there during the relevant time. Imposition of penalty under Section 76 and 77 were bad in law as per the judgement of the Hon’ble Punjab and Haryana cited (supra). The adjudicating authority had observed that no agreement was produced by the appellant, however, on the contrary, the Order-in-Original itself accepted that the appellant had produced copy of Agreement dated 01.09.2005. Both the orders have been passed without appreciation of complete facts. Thus, the entire demand was barred by limitation and appellant was entitled to the SSI exemption in view of the facts of this case.
FULL TEXT OF THE CESTAT CHANDIGARH ORDER
The present appeal is directed against the impugned order dated 23.06.2011 passed by the Commissioner (Appeals) of Central Excise, Delhi-III whereby the Ld. Commissioner (Appeals) has rejected the appeal of the appellant and has confirmed the demand of service tax of Rs. 1,53,979/- along with interest under Section 75 of the Finance Act, 1994. The Ld. Commissioner (Appeals) has also imposed equal penalty under Section 76 and 78 of the Finance Act, 1994 and also penalty of Rs. 1,000/- under Section 77 of the Finance Act, 1994.
2. Briefly the facts of the present case are that the appellant was engaged in maintenance & handling of corporation owned and contractor operated (COCO) retail outlet site of M/s Indo British Petroleum Ltd., Panipat (merged with IOCL in May, 2007) at Arya Nagar, Hisar from where petroleum products, mainly motor spirit and High-Speed Diesel are sold. For the said arrangement, an Agreement dated 01.09.2005 was entered between IBP Co. Ltd. and the appellant.
