Case Law Details
Lakshay International Pvt. Limited Vs Commissioner of Central Excise (CESTAT Chandigarh)
CESTAT Chandigarh held that Chartered Accountant certificate was provided for quantification of tax, however, the said certificate was not discussed. It is settled law that certificates given by Experts in the respective fields cannot be ignored without cogent reasons.
Facts- The appellants, M/s Lakshya International Private Limited (ST/537/2011) and M/s G.D. Tools and Forgings (ST/538/2011) are engaged in manufacture and exports of leather tool bags and polyester bags.
Both the appellants have been paying the overseas commission at an agreed percentage of business generated by them to their overseas commission agents who helped them to find customers abroad. It appeared to the Department that the appellants were rendering “Business Auxiliary Service” as per Section 65(19) as a commission agent; as the commission agents are located outside India, the appellants, as receivers of the service are liable to pay service tax under Reverse Charge Mechanism in terms of Rule 2 (1) (d) (iv) of the Service Tax Rules, 1994 w.e.f. 09.07.2007 in terms of Notification No.13/2003-ST dated 20.06.2003 as amended.
Conclusion- Coming to the quantification of the duty, we find that the appellants have produced Chartered Accountant certificates regarding the commissions paid to overseas agents for the period before and after 18.04.2006. We find that the lower authorities have simply relied on the figures proposed in the show cause notice and have not discussed at all the Chartered Accountant certificates. They have not also contradicted the said certificates. We are of the considered opinion that certificates given by Experts in the respective fields cannot be ignored without cogent reasons. Therefore, we find that the duty has been correctly paid by the appellants.
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