Case Law Details

Case Name : M R Patel & Sons Vs C.S.T. Service Tax (CESTAT Ahmedabad)
Appeal Number : Service Tax Appeal No. 435 of 2012
Date of Judgement/Order : 04/11/2022
Related Assessment Year :

M R Patel & Sons Vs C.S.T. Service Tax (CESTAT Ahmedabad)

CESTAT find that the present case involved mix question of law and facts. The learned Commissioner (Appeals) decided the matter relying on the Tribunal’s decision in the case of Coal Handlers (supra) wherein it was held that the identical services are classifiable under clearing and forwarding agent service. Since this very judgement which is sole basis of the Commissioner (Appeals) order which has been set aside and party’s appeal was allowed by the Hon’ble Supreme Court, we are of the view that since the identical facts and law point is involved, the learned Commissioner (Appeals) has to reconsider the matter in the light of the change of legal position between the Tribunal’s decision in Coal Handlers and the Apex Court decision in the same case. Since the facts are also need to be compared and verified between this case and the case of Coal Handlers, we are of the view that the matter should be remanded back to the Commissioner (Appeals) to decide afresh in the light of Hon’ble Supreme Court judgement in the case of Coal Handlers (supra). Accordingly, we set aside the impugned order and remand the matter to the Commissioner (Appeals) for passing a fresh order after taking into stock of our above observation.

FULL TEXT OF THE CESTAT AHMEDABAD ORDER

The brief facts of the case are that the appellant were engaged in providing the taxable service as Business Auxiliary Service and Renting of Immovable Property Service and registered with the service tax department. During the course of audit, it was observed that the appellant is providing services to Gujarat State Electricity Corporation in the nature of clearing and forwarding agent service and cannot be classified under the category of Business Auxiliary Service. The appellant had a contract with Gujarat State Electricity Corporation for the work of timely payment of railway freight and to undertake all such steps to ensure that freight pre­paid coal wagons reach the GSECL plant site and in return they were receiving commission. The appellants were having another contract with GSECL for loading supervision of coal wagons of Sikka TPS. The appellants were paying service tax from 10.09.2004 on Loading Supervision Charges and from 16.06.2005 on Commission received for pre-payment of Railway Freight under the category of Business Auxiliary Service. The issue of classification of services provided by the appellants to GSECL was examined as to whether the services provided by the appellants were classifiable under the category of Clearing & Forwarding Agent Service or under Business Auxiliary Service. Accordingly, it was concluded that the services provided by the appellants to GSECL to be classified under Clearing & Forwarding Agent Service and is taxable from 16.07.1997. Accordingly, a Show cause Notice dated 31.03.2009 was issued to the appellant which was adjudicated vide order-in-original whereby after adjusting the service tax paid on Business Auxiliary Service remaining amount was confirmed. The appellant being aggrieved by the order-in-original filed appeal before the Commissioner (Appeals) who heavily relying upon the decision of this Tribunal in the case of Coal Handlers Pvt. Ltd. 2004 (171) ELT 191 (T) held that the services provided by the appellant are classifiable under Clearing And Forwarding Agent Service. Accordingly, the demand of service tax and penalty under Section 78 was upheld. However, penalty imposed under Section 76 was set aside. Therefore the present appeal.

2. Shri S.J. Vyas, learned counsel appearing on behalf of the appellant submits that the appellant’s activity is identical to the activities involved in the case of Coal Handlers Pvt. Ltd. decided by the Tribunal. However, on the appeal filed by the appellant in the above case, the Hon’ble Supreme Court has allowed the appeal reversing the decision of this Tribunal which was reported as Coal Handlers 2015 (5) TMI 249 (SC). He submits that in the case of Coal Handlers (supra) there are additional activities involved despite that it was held that the services do not fall under Clearing and Forwarding Agent Service. He submits that their case is on better footing than the case of Coal Handlers, therefore, the ratio of the decision is directly applicable in the present case.

3. Shri V.G. Iyengar, learned Superintendent (Authorized Representative) reiterates the findings of the impugned order.

4. We have carefully considered the submissions made by both the sides and perused the records. We find that the present case involved mix question of law and facts. The learned Commissioner (Appeals) decided the matter relying on the Tribunal’s decision in the case of Coal Handlers (supra) wherein it was held that the identical services are classifiable under clearing and forwarding agent service. Since this very judgement which is sole basis of the Commissioner (Appeals) order which has been set aside and party’s appeal was allowed by the Hon’ble Supreme Court, we are of the view that since the identical facts and law point is involved, the learned Commissioner (Appeals) has to reconsider the matter in the light of the change of legal position between the Tribunal’s decision in Coal Handlers and the Apex Court decision in the same case. Since the facts are also need to be compared and verified between this case and the case of Coal Handlers, we are of the view that the matter should be remanded back to the Commissioner (Appeals) to decide afresh in the light of Hon’ble Supreme Court judgement in the case of Coal Handlers (supra). Accordingly, we set aside the impugned order and remand the matter to the Commissioner (Appeals) for passing a fresh order after taking into stock of our above observation.

(Pronounced in the open court on 04.11.2022)

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