CESTAT, NEW DELHI BENCH
Jagatjit Industries Ltd.
Commissioner of Central Excise, Ludhiana
Stay Order No. ST/S/563 of 2012-CUS.
APPLICATION NO. ST/2145 of 2011
APPEAL NO. ST/1027 OF 2011
MAY 16, 2012
Ms. Archana Wadhwa, Judicial Member
After hearing both the sides, we find that the Commissioner (Appeals) vide his impugned order dropped the major part of the demand as barred by limitation but confirmed service tax of Rs. 91,86,110/- which falls within the limitation period in addition penalties were also imposed upon the applicant.
2. The appellants are engaged in the manufacture of brand owners of Indian made foreign liquor and are getting the said branded alcoholic beverages manufactured from different contract bottling units on contracts basis. The said arrangement is covered by the agreement entered into by the appellant with the bottlers.
3. It is seen that for the period prior to the period involved in the present appeal, the appellants were issued Show Cause Notices proposing confirmation of service tax falling under the category of ‘Management Consultancy Services’. However, the demand in that case was confirmed on the ground that the appellant has provided franchisee services. The Tribunal vide its stay Order No. ST/315/2011 dated 2.6.2011 granted unconditional stay by taking note of Board’s Circular as also on the ground that the confirmation of service tax under a category different than the one mentioned in the Show Cause Notice cannot be permitted.
4. The contention of the ld. Advocate is that in the present case also the Show Cause Notice proposed confirmation of service tax under the category of franchisee services whereas the same stands confirmed under IPR. As such, he submits that he is entitled to unconditional stay on the same very ground. He also draws our attention to stay order passed by the Mumbai Bench of the Tribunal in the case of Diageo India (P.) Ltd. v. CCE  34 STT 34 (Mum – CESTAT) (Mag.) being stay wherein unconditional stay stand granted to their competitors, involving an identical set of circumstances.
5. Shri Jain ld. A.R. appearing for Revenue agrees that proposal in the Show Cause Notice was for confirmation of demand falling under the category of franchisee services and the tax stand confirmed under IPR services but submits that the appellants were given full opportunity to present their case and contest the confirmation of demand under IPR, during the process of adjudication. He submits that the appellants themselves relied upon Board’s Circular which deals with the IPR services and as such they were fully aware of the Revenue’s stand for confirmation of demand of tax under IPR.
6. At this prima facie stage, we taken note of the earlier decision of the Tribunal in the same appellant’s ground case granting unconditional stay on the ground that the confirmation of demand under a category different than one proposed in the Show Cause Notice cannot be upheld. The Tribunal had, for the above proposition, relied up the earlier decision of the Tribunal in the case of Mahakoshal Beverages (P.) Ltd. v. CCE  18 STT 383 (Bang. – CESTAT). As such, by referring the earlier stay order in the appellant’s own case as also to the stay order passed by the Mumbai Bench of the Tribunal, we are of the view that the appellants are entitled to unconditional dispensation with the pre-deposit of duty and penalty. We order accordingly and allow the stay petition.