M/S Gujarat Security Guard Services vs Commissioner, Central Excise & Service ...

Appeal No.ST/135/2006-DB [Arising out of OIA No.12/2006, dt.27.02.2006, passed by Commissioner (Appeals), C. Excise & Service Tax, Ahmedabad-III]

M/s Gujarat Security Guard Services Appellant

Vs

Commissioner, Central Excise & Service Tax, Ahmedabad-III Respondent

Represented by:

For Appellant: Shri H.D. Dave, Advocate For Respondent: Shri T.K. Sikdar, Authorised Representative

For approval and signature:

Honble Mr. P.K. Das, Member (Judicial) Honble Mr. P.M. Saleem, Member (Technical)

1. Whether Press Reporters may be allowed to see the No 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 of Seen the order?

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

CORAM:

HONBLE MR. P.K. DAS, MEMBER (JUDICIAL) HONBLE MR. P.M. SALEEM, MEMBER (TECHNICAL)

Date of Hearing/Decision:29.10.2015

Order No. A/11581 / 2015, dt.29.10.2015

Per: P.K. Das

The relevant facts of the case, in brief, are that the Appellant herein are engaged in Security Agency Service as defined under Section 65(94) of Finance Act, 1994 w.e.f. 14.10.1998 and providing security service to their clients like ONGC, GEB etc. The Central Excise officers, during investigation, found that the Appellant collected the amount from their clients during the period 1999-2000 to 2003-2004, which was not declared in ST-3 return and no tax was paid thereon. A Show Cause Notice, dt.16.09.2004 was issued, proposing demand of Service Tax of Rs.40,07,737.00 alongwith interest and to impose penalty for the period 1999 to January 2004. It has also proposed to appropriate the amount of Rs.6 lakhs as already paid by the Appellant. The Adjudicating authority confirmed the demand of Service Tax alongwith interest and imposed penalties under the various provisions of Finance Act, 1994. The Commissioner (Appeals) upheld the Adjudication order.

2. Heard both the sides and perused the records.

3. The learned Advocate submits that the demand was raised merely on the amount as shown in the ledger account, without taking into consideration the actual receipt. In this context, he drew the attention of the Bench to the Annexure A to Show Cause Notice. It is submitted that the only deduction of TDS has taken while determining the taxable value. It is further submitted that the salaries/minimum wages of the employees, contribution to EPF, ESI etc had not been excluded from the taxable value. He further submits that the Appellant had paid a sum of Rs.24 lakhs against the outstanding demand. It is submitted that they have categorically contested the finding of the lower authorities that they have realized the amount. In this context, the learned Advocate drew the attention of the Bench to the relevant grounds of appeal. He also submitted that arbitration proceedings are going on with ONGC and they have not collected the Service Tax from their clients.

4. The learned Authorised Representative for the Revenue strongly opposed the submission of the learned Advocate. He submits that the case relates to 1999 and they have not submitted any document before the lower authorities. So, the Revenue rightly determined the duty liability on the basis of the amount shown in the ledger. He further submits that the arbitration proceedings with the ONGC has no relation with the demand of Service tax.

5. We find that the Appellant is a proprietorship firm. It is seen from the grounds of appeal that the Appellant disputed the finding of the lower authorities and categorically stated that they have not collected the amount from their client. It is further stated that though they have issued the bills for these amounts, which are outstanding amount to be recovered from the clients. In this context, the learned Advocate drew the attention of the Bench to the arbitration proceedings with the ONGC for demanding the dues. The learned Advocate also placed the statement before the Bench that the amount paid to the workers, would not be included in the gross value. He relied upon the decision of the Tribunal in the case of Gujarat Intelligence Security Vs CCE Vadodara-I  2010 (19) STR 270 (Tri-Ahmd), and the Larger Bench decision of the Tribunal in the case of Shri Bhagavathy Traders Vs CCE Cochin - 2011 (24) STR 290 (Tri-LB).

6. The submission of the learned Authorised Representative is that the appeal is old one and there is no reason to remand the matter. But, in this case, it appears that the reimbursement expenses including salaries and other expenses, have been included in the taxable value for Security Agency service, which is contrary to the provisions of law and the decision of the Tribunal. So, the Appellant should be given an opportunity to place the documents before the lower authorities in the interest of justice.

7. In view of the above discussion, we set aside the impugned order. The matter is remanded to the Adjudicating authority to decide afresh after considering the documents and the submissions of the Appellant. In this context, the learned Advocate undertakes to appear before the Adjudicating authority to submit the documents and appear before the Adjudicating authority within two months from the date of receipt of this order. If the Appellant fails to appear before the Adjudicating authority within this period, the Adjudicating authority shall pass the order in accordance with law, without giving any further opportunity. We make it clear that the order is passed without expressing any view on merits of the case. The appeal is allowed by way of remand.

(Dictated & Pronounced in Court)

(P.M. Saleem) (P.K. Das) Member (Technical) Member (Judicial)

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