Commissioner Of Central Excise vs M/S Prakash R. Jaiswal

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI

COURT No. I

Appeal No. ST/278 and 284/10

(Arising out of Order-in-Appeal No. SR/83/NGP/2010 dated 10.03.20100 passed by Commissioner of Central Excise (Appeals), Nagpur)

For approval and signature:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. P.S. Pruthi, Member (Technical)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : Seen of the Order?

4. Whether Order is to be circulated to the Departmental : Yes authorities?

Commissioner of Central Excise Nagpur (in Appeal No. ST/284/10) Appellant Vs.

M/s Prakash R. Jaiswal Respondent  M/s Prakash R. Jaiswal Appellant (in Appeal No. ST/278/10) Vs. Commissioner of Central Excise Respondent Nagpur Appearance:

Shri S.V. Nair, Supdt. (AR) for appellant Shri Durgesh Nadkarni, Advocate for respondent

CORAM:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. P.S. Pruthi, Member (Technical)

Date of Hearing: 04.06.2015 Date of Decision: 04.06.2015

ORDER NO

Per: M.V. Ravindran

These two appeals are preferred against the very same Order-in-Appeal hence they are being disposed of by a common order. M/s. Prakash R. Jaiswal has filed an appeal which is numbered as ST/278/10 and the departments appeal is numbered as ST/284/10.

2. Heard both sides and perused the records.

3. The issue involved in this case is regarding the service tax liability on the activities of the appellant-assessee in marketing and distribution of recharge vouchers of BSNL. 3.1 Revenue is aggrieved by the impugned order which was passed by the first appellate authority in respect of the recharge vouchers holding that service tax liability does not arise. It is also the grievance of Revenue that the first appellate authority reduced the penalty imposed by the adjudicating authority in proportion to the demands set aside by him. 3.2 Appellant-assessee is aggrieved by the impugned order on imposition of penalties on the service tax liability for the services rendered by them.

4. On perusal of the records, we find that the period involved in this case in respect of the following services are as under:-

(a) BSNL recharge coupons under Business Auxiliary Service - 01.07.2003 to 31.01.2008.

(b) Paddy Milling charges under Business Auxiliary Service - 2005-06 to 2006-07.

(c) Commission on Air Travel Agency  2006-07.

(d) Good Transport Agency - 2004-05 to 2006-07.

Perusal of the records also transpires that the appellant-assessee has not filed any appeal against the confirmation of demand in respect of the services rendered at Sl. (b), (c) and (d) herein above, hence the service tax liability against these three services as upheld by the first appellate authority are confirmed and the appellant-assessee is liable to pay the same along with interest. 4.1 As regards the service tax liability in respect of Sl. (a) herein above, we find that the issue is regarding the service tax on BSNL recharge coupons which is settled in favour of revenue by the decision of the Kerala High Court in the case of Idea Mobile Communication Ltd.  2010 (9) STR 18 (Ker) and upheld by Apex Court. During the period in question, the issue was agitated before various judicial forum and there were many conflicting views by various benches. 4.2 As regards the service tax liability under Business Auxiliary Service wherein the appellant  assessee in this case could have entertained bonafide belief as to that he is not liable to discharge the service tax liability. 4.3 We find that the show-cause notice dated 16.10.2008 was issued by invoking extended period for demand of service tax from 01.07.2003 to 31.03.2008.

In our considered view, invocation of extended period in this case seems to be incorrect as the issue was being agitated before the judicial forum. Accordingly, we hold that the show-cause notice which invokes the extended period for demand of service tax from the appellant-assessee needs to be set aside and we do so. However, for the demand within the period of limitation from the date of issuance of show-cause notice we hold that the appellant-assessee is liable to pay the service tax liability along with interest. To that extent we reject the appeal filed by the appellant-assessee. 4.4 As regards the penalty imposed, we find that the appellant-assessee could have entertained a bonafide belief on the service tax liability on the recharge coupons as there were many conflicting decisions by the Tribunal, a view could be taken that appellant assessee need not be visited by penalties. 4.5 As regards the service tax liability on paddy milling charges, the appellant-assessee could have entertained a bonafide belief that the paddy milling charges on agro product which has been undertaken by the appellant may not be covered under the tax net.

4.6 As regards the service tax liability on goods transport during the relevant period, the issue was being agitated before various authorities. As these situations could have raised doubt of many as whether they are liable to pay the service tax. In the peculiar facts and circumstances of this case, the appellant has made out a case with justifiable reason that the penalties need not be imposed on them. By invoking the said provisions of Section 80 of the Finance Act, 1994, we set aside the penalties imposed by the adjudicating authority under various sections.

5. Appeal is disposed of as indicated here-in above.

(Dictated in Court)

(P.S. Pruthi) Member (Technical) (M.V. Ravindran) Member (Judicial)

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