Commissioner Of Service Tax vs M/S Premchand Gokaldas
- CitationAppeal No. : ST/139/2008
Ratio decidendi
The rule this decision rests on
Freight charges reimbursed by principals form part of the gross value for Service Tax purposes under the category of Clearing and Forwarding Agent services, following the Tribunal's decision in Clearchem Agencies, where the issue was held to be directly governed by that authority and the contrary High Court decisions relied on by the respondent were held inapplicable as they concerned construction services involving contracts. Where the demand rests on an issue decided by a Larger Bench of the Tribunal, the extended period of limitation and the penalty cannot be sustained, as held in Clearchem Agencies. Where the record is disputed as to whether the assessee recovered the Service Tax from the customer, the matter is to be remanded to the Adjudicating Authority to decide afresh in light of the Tribunal's decision and the facts.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[ Arising out of OIA-79/2008/STC/RAJU/COMMR-A-/AHD dtd 15.5.2008 passed by Commissioner of Service Tax AHMEDABAD ]
Commissioner of Service Tax - AHMEDABAD - Appellant(s)
Vs
M/s Premchand Gokaldas - Respondent (s)
Represented by For Assessee : Shri N K Oza, Advocate For Revenue : Shri J Nair, Authorised Representative
For approval and signature :
Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical)
1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No 3 Whether their Lordships wish to see the fair copy of the Order?
Seen 4 Whether Order is to be circulated to the Departmental authorities?
Yes
CORAM :
Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical)
Date of Hearing / Decision : 21/10/2015
ORDER No. A/11652 / 2015 21/10/2015
Per : Mr.P.K. Das,
Revenue filed this appeal against the order of the Commissioner (Appeals), where the adjudication order was set aside.
2. Heard both the sides and perused the records.
3. The respondents were engaged in providing the services of Clearing and forwarding Agent. During the period 2006-07 they have not included freight charges in the gross value. Thus, there was a demand of Service Tax of Rs 7,36,884/- alongwith interest and penalty proposed by show cause notice dtd 2.9.2007. The Adjudicating Authority confirmed the demand of Service Tax alongwith interest and also imposed penalty of equal amount of tax under Section 78 of the Finance Act, 1994. The Commissioner (Appeals) set aside the Adjudication order.
4. The Learned Advocate on behalf of the respondent submits that the issue is covered by the decision of the Honble Delhi High Court in the case of Intercontinental Consultants & Technocrats Pvt Ltd vs Union of India 2013.29.STR.9 (Del). He also relied upon the decision of the Honble Madras High Court in the case of CST, Chennai vs Sangamitra Services Agency 2013.06.CX0099.
5. On the other hand, the Learned Authorised Representative on behalf of the Revenue submits that this issue is decided in favour of the Revenue by the Larger Bench of the Tribunal in the case of Sri Bhagavathy Traders Vs CCE, Cochin 2011.24.STR.290 (Tri.LB), which was followed by the Tribunal in the case of Clearchem Agencies Vs CCE, Indore 2015.37.STR..823 (Tri.Del).
6. We find that in the case of Clearchem Agencies (supra), the Tribunal held that the gross value for payment of Service Tax under the category of Clearing and Forwarding Agent services would include expenses reimbursed by principals. It is noted that the issue involved in the present appeal is directly related to the decision of the Clearchem Agencies (Supra). The decision relied by the Learned Advocate, is in respect of the Construction Service and Others the contract/agreement were involved. As the present case is directly related to the Clearchem Agencies (supra), we find that the order of the Adjudicating Authority is liable to be upheld. But, as the issue was decided by the Larger Bench of the Tribunal, demand of Service Tax for the extended period of limitation and penalty cannot be sustained, as held by the Tribunal in the case of Clearchem Agencies (supra).
7. We find from the Adjudication order that the respondent had recovered the Service Tax from the customer. The Learned Advocate for the Respondent submitted that they have only collected the freight charges and they have not recovered Service Tax. As there is a dispute in the facts of the case, it is appropriate that the matter should be remanded to the Adjudicating Authority to decide afresh after considering the decision of the Tribunal in the case of Clearchem Agencies (supra).
5. In view of that, we set aside the impugned orders remand by Commissioner (Appeals). The matter is remanded to the Adjudicating Authority to decide afresh after considering the decision and the facts in proper manner and to pass order in accordance with the law.
6. The appeal filed by the Revenue is allowed by way of remand.
(Dictated and pronounced in the Court)
(P.M. Saleem) (P.K. Das) Member (Technical) Member (Judicial)
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