Chandra Lubricare vs Commissioner Of Central Excise

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI

Appeal No.ST/84/2005

[Arising out of Order-in-Appeal No.70/2005 dt. 26.5.2005 dt. passed by the Commissioner of Central Excise (Appeals), Madurai]

Chandra Lubricare Appellant

Versus

Commissioner of Central Excise, Madurai Respondent

Appearance:

None For the Appellant

Ms. Indira Sisupal, AC(AR) For the Respondent

CORAM :

Honble Shri R. Periasami, Technical Member Honble Shri P.K. Choudhary, Judicial Member

Date of Hearing/Decision : 26.8.2015

FINAL ORDER No.41048/2015

Per R. Periasami

The appeal is taken up for hearing. The present appeal is filed by the appellant against the Order-in-Appeal dt. 26.5.2005. Earlier this appeal was listed before DB and the matter was listed on 18.5.2015 before SM and got adjourned to 25.5.2015. On 25.5.2015, the matter was again transferred to DB, the issue involved being taxability. When the matter was listed before DB on 1.6.2015, Shri Joseph Prabhakar, Advocate on record informed there was no instructions from the client and notice of dismissal of appeal was issued. Again the matter was listed on 9.7.2005 and 28.7.2005 wherein it was informed that since there was no instruction, Advocate withdrew from appearing in the matter. Today, the case is arising for hearing. Today also, none appeared nor there is any fresh vakalat filed. Accordingly appeal is taken up for disposal ex-parte based on the records submitted.

2. The brief facts of the case are that the appellants are rendering services as operator of customer care to M/s.Castrol India Ltd.(CIL). Appellants are registered with service tax for payment of service tax under the category of Clearing & Forwarding services. The issue relates to payment of service tax of Rs.41,244/- being service tax payable under C&F charges. Adjudicating authority in his order confirmed the demand of Rs.41,244/- and also appropriated the amount of Rs.21,363/- already paid by them and also imposed penalty under section 75A, 76 and 77 and equivalent penalty under section 78 of the Finance Act. On appeal, the Commissioner (Appeals) rejected the appeal. Hence the present appeal.

3. Ld. A.R reiterated the findings of the adjudication order and Commissioner (Appeals) order. She drew our attention to para 5 & 6 of the OIA wherein the LAA has discussed the issue in detail and arrived at a finding that appellants claiming VSAT Allowances and Delivery Charges from CIL which are not in nature of reimbursable. She submits that authorities below have rightly confirmed the demand.

4. We have carefully considered the submission of Ld. A.R and also examined the grounds of appeal and the impugned order. We find that the LAA has discussed in his order as to how the functions of appellant would render them to liable for service tax. The appellants have claimed deductions towards reimbursable charges under the head "VSAT Allowances & Delivery Charges" from M/s.CIL. We find that LAA has relied Tribunals decision in the case of Mett Macdonald Ltd. Vs CCE Jaipur  2001 (134) ELT 799 (Tri.-Del.) wherein also similar issue arose and the Tribunal rejected contention of the appellant therein. The LAA has held that deductions made towards VSAT Allowances & Delivery Charges are not permissible under the category of Services of Marketing Research Agency and not covered by Board's circular dt. 7.10.98. In this regard, he relied Honble High Court order in the case of Adwise Advertising (P) Ld. Vs UOI  1998 (97) ELT 35 (Mad.) wherein the Court ruled out any deduction from the gross amount which is liable for tax. We find that appellants have entered into a contract agreement with Castrol India Ltd. which covers entire functions of clearing and forwarding of the appellant. Therefore, service tax is demandable on the gross amount and the same cannot be vivisected. The appellate authority has rightly relied Honble Supreme Court decision reported in 2004 (170) ELT A181 (SC) wherein the apex court has upheld the Tribunals order in the case of Daleim Industrial Co. Ltd. Vs CCE - 2003 (155) ELT 457 (Tri) holding that primary objection of the contract would determine the issue and the same cannot be vivisected and part of it be subjected to tax. In view of the above discussions, we hold that LAA has rightly upheld the demand. We do not find any infirmity in the impugned order and the same is upheld. The appeal is dismissed.

(Dictated and pronounced in open court)

(P.K. CHOUDHARY) (R. PERIASAMI) JUDICIAL MEMBER TECHNICAL MEMBER

gs 3