AANEX SERVICES Vs. COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH

JUDGEMENT

(1.) THE appellant booked cargo space with Indian Airlines Limited ("IAL" for short), under City Specific Direct Shipment (CSDS) Scheme and re -distributed such cargo space in retail to persons who wanted to send cargo in such space.

(2.) A bunch of Airway Bills were issued by IAL on security deposit and submission of bank guarantee. The Appellant paid to the IAL for cargo space booked by them. It is stated that IAL wanted the appellant to pay service tax separately. The appellant submits that they paid such service tax against receipts issued by IAL. During the period 1 -4 -2005 to 30 -9 -2005 the appellant took Cenvat credit of such service tax paid to IAL on the basis of photocopies of receipts issued by IAL and utilized it for payment of service tax on space resold by them to retail customers. Revenue was of the view that such Cenvat Credits were taken without having documents specified in Rule 9(1) of Cenvat Credit Rules, 2004 and hence were unauthorized credit. Revenue issued a notice dated 14 -11 -2006 for recovering unauthorized credits so taken and utilized. The Notice has been adjudicated resulting in confirmation of tax demand of Rs. 13,51,976/ - along with interest. Further a penalty equal to this amount has been imposed on them under Rule 15(4) of Cenvat Credit Rules, 2004 read with Section 78 of Finance Act, 1994. Aggrieved by the order the appellant filed an appeal with the Commissioner (Appeal) who did not give any relief to the appellant. Aggrieved by the order of the Commissioner (Appeal), the appellant has filed this appeal before the Tribunal. The Counsel for appellant submits that the activity of the appellant was not a taxable activity because there was no service being rendered. The contention is that they were buying and selling cargo space and this cannot be considered as "Business Auxiliary Service" under which category they paid service tax. He relies on the following decisions in support of his argument:

(3.) THE Counsel submits that they paid service tax under a wrong understanding of law. Since there is no liability to tax ab initio the present demand is not maintainable. It is seen that this contention was not raised before the adjudicating authority but was raised before the First Appellate Authority. The Counsel argues that this is purely a legal issue which can be raised at any stage of the proceeding.