ALPHA POLYPROPYLENE Vs. COMMISSIONER OF CENTRAL EXCISE, DAMAN

JUDGEMENT

(1.) THIS appeal is filed by M/s. Alpha Polypropylene against Order -in - Original No. 26/Demand/Daman/2006, dated 26 -12 -2006, passed by Commissioner, Central Excise & Service Tax, Daman.

(2.) THE office premises of Alpha Group of companies (M/s. Alpha Polymers, M/s. Alpha Containers, M/s. Alpha Polypropylene and M/s. Alpha Platomer) were visited by Central Excise officers on 4 -2 -2004. On scrutiny of the records and copy of the agreement with their principal, it was observed by the Departmental officers that M/s. Alpha Polypropylene (hereinafter referred to as appellants) rendered the services of procuring orders and collecting payments from various customers and also place the orders to their principals on behalf of the customers and also organized supply of material from their principals to their customers directly, on the basis of consideration of quantity based commission. It was the view of the Department that the appellants are engaged in sales and purchase of the goods on behalf of their principals i.e. M/s. Reliance Industries and M/s. IPCL and their commission is based upon the quantum of sale and purchase and in addition, they undertake the responsibility of realization of debts, development of market and keep watch for the market trend for their principals. It was the view of the Department that such activity of the appellant would fall under the category of Clearing and Forwarding Agent services under the provisions of Section 65(23) of Finance Act, 1994 and is chargeable to Service Tax w.e.f. 1 -9 -1999. Accordingly, a show cause notice dated 23 -8 -2004 was issued to the appellant demanding Service Tax amounting to Rs. 21,93,742/ - along with interest and also proposing penalties under Sections 75A, 76, 77 and 78 of Finance Act, 1994. The said show cause notice was confirmed by original authority vide Order -in -Original No. 10/AC/MDMN/ST/04 -05, dated 31 -12 -2004. While deciding the case, the adjudicating authority imposed discretionary penalty of Rs. 1,67,400/ - under Section 76 of Finance Act, 1994, besides imposing penalty of Rs. 500/ - under Section 75A of Finance Act, 1994, Rs. 1000/ - under Section 77 of Finance Act, 1994 and penalty of Rs. 21,93,742/ - under Section 78 of Finance Act, 1994. The Commissioner, in exercise of his powers under Section 84 of Finance Act, 1994, reviewed the Order -in -Original only on the ground that the mandatory penalty should be imposed upon the appellant under Section 76 of Finance Act, 1994 and after issuing notice dated 1 -9 -2005 to the appellant, the present review order was passed by Commissioner, Central Excise, Daman and the penalty has been enhanced to Rs. 21,96,743/ - under Section 76 of Finance Act, 1994. The appellant has challenged this order in the present appeal.

(3.) NONE appeared for the appellants.