M/S Indian Oxalate Ltd vs Commissioner Of Central Excise, ...

(Arising out of Order-in-Appeal No. PUN-EX-CUS-003-155-2012-13 dated 7.6.2013 and No. PUN-EX-CUS-003-158-2013-14 dated 18.6.2013 passed by the Commissioner of Central Excise (Appeals), Pune-III).

For approval and signature:

Honble Shri Anil Choudhary, Member (Judicial)

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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 : Yes 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? ======================================================

M/s Indian Oxalate Ltd. Appellant

Vs.

Commissioner of Central Excise, Pune-III Respondent

Appearance: Shri N.S. Patel, Advocate for Appellant

Shri A.B. Kulgod, AC (AR) for Respondent

CORAM: SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL)

Date of Hearing: 02.06.2015

Date of Decision: .2015

ORDER NO.

Per: Shri Anil Choudhary

The appellants are in appeal against separate impugned orders passed by the Commissioner (Appeals), Pune-III. As the issue is common i.e. levy of Service Tax on the appellant in respect of Goods Transport Agency services provided during the period from 16.11.1997 to 1.6.1998.

2. For the sake of convenience, I take up the facts from the appeal No. ST/88054/13 filed by M/s Indian Oxalate Ltd. The appellant is a manufacturer registered with the department and among other services availed the services of goods transport operators in the course of their business. The freight for the Goods Transport Agency service was either paid by the appellant themselves or through the agent of the transporters. The appellant did not pay any Service Tax as the recipient of service, since at the relevant time there was no provisions for payment of Service Tax under Goods Transport Agency service as recipient of service. A show-cause notice dated 12.11.2002 was issued for the period 16.11.1997 to 1.6.1998 invoking the extended period demanding the Service Tax in respect of Goods Transport Agency service on the appellant as recipient of service on reverse charge. This show-cause notice was under Section 73 of the Finance Act, 1994. Subsequently, sub-section 3 of Section 73 was amended by the Finance Act, 2003 retrospectively. However, in the amended Section 73, there was no reference to Section 71A. Sub-section 3 of Section 73 was substituted effective from 10.9.2004 prospectively. Thereafter the Revenue again issued show-cause notice dated 9.11.2004 for the same period for demand under the same classification of Goods Transport Agency proposing to levy Service Tax on Goods Transport Agency service under Section 73(1) of the Finance Act, 1994 and further proposing to impose penalties under Sections 76, 77 and 78 along with interest under Section 75 on the tax amount.

2.2 The show-cause notice was adjudicated vide Order-in-Original dated 23.11.2011 dropping the show-cause notice dated 12.11.2002/9.11.2004. The Assistant Commissioner adjudicating the show-cause notice has observed that the show-cause notices were un-quantified. Further, the issue is framed as to  (i) whether the appellant is failed to pay Service Tax which it was liable to pay Service Tax under Section 68 of the Act, (ii) whether provisions of Section 73(1) of the Act are correctly invoked in the case, and (iii) whether show-cause notice issued without quantification the Service Tax is sustainable in law?

2.3 So far the first issue is concerned, it was held that the appellant in view of the provisions of Section 2(i)(d)(xii) & (xvii) of the Service Tax Rules, 1994 as validated by Section 117 of Finance Bill, 2003, the appellant was held liable to pay Service Tax on Goods Transport Agency service as recipient of service and further required to file return under the amended Section 71A of the Act.

2.4 So far the second issue is concerned, it was observed that the appellant neither filed the mandatory return nor paid the Service Tax on the Goods Transport Agency service availed and thus they suppressed the material facts from the knowledge of the Revenue with an intention to evade tax and as such the provisions have been rightly invoked.

2.5 As regards the third issue whether the show-cause notice is sustainable being issue without quantification of the tax amount, reliance was placed on the ruling of this Tribunal in the case of Standard Industries Ltd. Vs. Collector of Central Excise, Bombay  1995 (75) ELT 829 (Tri), wherein it has been held that the quantification of duty is to be done by the adjudicating authority himself, it cant be left to be worked out on the basis of the guidelines given in the adjudicating order. Therefore, it was further held that duty yet to be quantified cannot be confirmed under Section 11A of the Central Excise Act. Further reliance was placed on the ruling of this Tribunal in the case of Commissioner of Central Excise Vs. GPL Polyfils Ltd.  2005 (183) ELT 27 (Tri-Del), wherein it has been held that duty amount when not quantified in the show-cause notice, no demand can be validly raised under Section 11A of the Central Excise Act. Further reliance was placed in the case of Metal Forging vs. UOI  2002 (146) ELT 241 (SC), wherein it has been held by the Apex Court that show-cause notice is mandatory requirement for raising demand.

Communications, orders, suggestions or advise from the department are not to be deemed to be show-cause notice. A specific notice indicating amount demanded and calling upon the noticee to show cause if he has any objection to such demand necessary. Accordingly, it was held that show-cause notice is in vague and not sustainable. Further, reliance was placed on the ruling of the Tribunal in the case of LH Sugar Factories Ltd. Vs. Commissioner of Central Excise, Meerut  2004 (165) ELT 161, where in similar facts and circumstances where show-cause notice was issued, it was held that during the relevant period Section 73 takes only in the case of appellant who are liable to file return under Section 70. The liability of filing returns is cast on the appellant under Section 71A as the receiver of service which was introduced in the Finance Bill, 2003. Thus, during the period in question no notice could have been issued under Section 73 for non-filing of return under Section 70. Accordingly, the Tribunal had held that the assessee  service receiver is not required to file return under Section 73 prior to 2003. Accordingly, the proceedings were quashed by the Tribunal.

The said order of the Tribunal was challenged by the Revenue before the Hon'ble Supreme Court and vide order dated 27.7.2005 in a batch of appeal, the Hon'ble Supreme Court entirely agreed by the conclusion arrived by the Tribunal and dismissed the appeal of the Revenue.

2.6 Being aggrieved, the Revenue preferred appeal before the Commissioner (Appeals), who vide the impugned order reversing the Order-in-Original and held that Service Tax is quantifiable from the appellant  recipient of service for the period 16.11.1997 to 1.06.1998 and have directed he adjudicating authority to quantify the liability and further confirmed the interest on the un-quantified amount.

3. Being aggrieved, the appellant is in appeal before this Tribunal on the following grounds: -

(Dictated and pronounced in Court)

(Anil Choudhary) Member (Judicial)

Sinha

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