Pratap Singh Jyala vs Commissioner Of Central Excise

[Arising out of Order-In-Original No. MRT-EXCUS-002-APP-42/14-15 dated 27/08/2014 passed by Commissioner of Custom & Central Excise, Meerut]

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see 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 CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

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

4 Whether Order is to be circulated to the Departmental authorities?

Pratap Singh Jyala Appellants

Vs.

Commissioner of Central Excise Respondent

& ST, Meerut II

Appearance:

Shri S C Jain, Advocate for the Appellants

Shri G R Singh, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 26.05.2015

FINAL ORDER NO. A/ 51737 /2015-(SM)

Per Ashok Jindal :

The appellant is in appeal against the impugned order wherein the service tax has been demanded for the period 2004-05, 2005-06 under the category of Business Auxiliary services.

2. The facts of the case are that the appellant is providing Business Auxiliary service being individual i.e. Shri Pratap Singh Jyala during the period 2004-2005 and 2005-2006. The show cause notice was issued on 26.6.2008 by invoking extended period of limitation to demand service tax from the appellant under the category of Business Auxiliary services. Both the lower authorities confirmed the demand against the appellant along with interest, penalty were also imposed. Aggrieved from the said order, appellant is before me.

3. Learned counsel for the appellant submits that during the relevant period, the service tax is payable under the category of Business Auxiliary service for the service provided by a commercial concern, and not by service provided by an individual. In fact, in this case the services have been provided by the appellant being individual concern. Therefore, in the light of decision of this Tribunal in the case of Bazpur Co-op Sugar Factory Limited vs. Commissioner of Central Excise, Meerut II [2012 (28) STR 145 (Tri-Del)] and in the case of Mangal Singh vs. CCE Jaipur [2008 (11) STR 17 (Tri-Del)] , the appellant is not liable to pay the service tax. It is further submitted that as Show cause notice has been issued by invoking extended period of limitation. It is in dispute whether the appellant can be treated as commercial concern or not is a matter of interpretation. Therefore, extended period is not invokable.

4. On the other hand, learned AR supported the impugned order and submits that adjudicating authority has relied on certain case laws namely, CCE vs. Employ Me [2006 (111) ECC 716 (T-Bang)] wherein this Tribunal has held that in the absence of definition of commercial concern in the Finance Act, 1994 and Service Tax Rules, we have to adopt the popular meaning of the expression commercial concern given in the Oxford Advanced Learners dictionary. He further relied upon the decision of Apex Court in the case of Laxmi Engineering Works vs. P S G Industrial Institute [AIR 1995 SC 1428] to rely on the definition of commercial concern.

5. Heard the parties. Considered the submissions.

6. I have gone through the case law relied by learned AR in the case of Employ Me. The definition has been taken as the commercial concern which indicate that the concern is engaged in the activity with profit motive. The said meaning has not defined if the individual is engaged in the activity of profit then same can be called as commercial or not. Therefore, said case law is not relevant to the facts of the present case. As in the case of Laxmi Engineering Works (supra), the Honble Apex Court has treated the commercial concern as sole proprietorship. The said case is not applicable to the facts of the present case as appellant is not a proprietorship concern. Further the decision of Bazpur Co-op Sugar Factory Limited is squarely applicable to the facts of this case as in that case it was held that individual concern is not liable to pay any service tax. Moreover, same view was taken in the case of Mangal Sing. Further, I find that since definition of commercial concern which have taken effect from 1.5.2006 wherein the word commercial concern has been substituted by any person. Therefore intention of the legislature is clear that prior to 1.5.2006, the services provided by an individual was not to be treated as service provided by commercial concern. Moreover in this case, show cause notice has been issued by invoking extended period of limitation whereas there is no suppression on the part of the appellant that appellant being a commercial concern suppressed the fact from the department not to pay the service tax. In these circumstances, I hold that appellant is required to pay service tax for the period 2004-2005 and 2005-2006 under the category of business auxiliary service being an individual by invoking extended period of limitation.

7. Therefore, impugned order is set aside. Appeal is allowed with consequential relief, if any.

(Dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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