UJJAWAL PARIVAHAN SAHAKARI SAMITI LTD. Vs. CCE

JUDGEMENT

(1.) THIS appeal has been filed by M/s. Ujjawal Parivahan Sahakari Samiti Ltd. (hereinafter referred to as appellants) against the Order -in -Original No. 9/2008/ST/JPR -II/Commissioner, dated 3 -12 -2008 passed by the Commissioner Central Excise, Jaipur -II. Brief facts of the case are that the appellants were providing services to M/s. Rajasthan State Mines and Minerals Ltd. (M/s. RSMML). The appellants were having with RSMML agreement dated 27 -11 -2002 and 19 -12 -2002 and are registered with the Service Tax Department and paying the Service Tax under the category Business Auxiliary Service since 25 -6 -2005. On scrutiny of the documents, records and agreement received from the appellants it was observed by the Central Excise Officers that appellants have deployed machineries for excavation, crushing of lime stone and transportation (loading/unloading) of ROM & crushed lime stone. According to the Department these activities fall under the category of "Cargo Handling Services" with effect from 16 -8 -2002 and under "Business Auxiliary Services" with effect from 10 -9 -2004. On scrutiny of their records and the ledgers it was observed that appellants received an amount of Rs. 17,96,59,771/ - as consideration during the period 1 -2 -2003 to 31 -3 -2007. Accordingly it was contended by the Department that appellants have provided the services of loading/un -loading/sorting/staking/dumping/crushing of Limestone to M/s. RSMML falling under the category of "Cargo Handling Service" for the period 1 -2 -2003 to 9 -9 -2004 and with effect from 10 -9 -2004 under Business Auxiliary Service. Accordingly a Show Cause Notice dated 17 -3 -2008 was issued to the appellants demanding the Service Tax of Rs. 1,89,44,579/ - along with interest and also for imposition of penalty under various provision of the Finance Act. The appellants contested the Show Cause Notice and after due process the case was adjudicated by the Commissioner vide impugned order who confirmed the Service Tax amount along with interest and also imposed the penalty under Sections 76, 77 and 78 of the Finance Act on the appellants. Appellants have challenged the impugned order in the present appeal.

(2.) AS regards the classification of service under Business Auxiliary Service with effect from 10 -9 -2004 he submits that Commissioner has classified the service under Business Auxiliary Service as defined under Section 65(19) of the Finance Act as any services in relation to production of goods on behalf of the client. He submits that entire range of services rendered by the appellant to RSMML is for the ultimate purpose of mining limestone and making limestone gitties. These services are composite in nature but essentially are services of mining of limestone and these services are for the client and not on behalf of the client. He further submits that definition of Business Auxiliary Service was further amended with effect from 16 -6 -2005 under which this clause by the definition was amended to read as any services in relation to production or processing of the goods on the behalf of the client. He submits that with effect from 16 -6 -2005 the appellants are paying the Service Tax under category of Business Auxiliary Service and there is no dispute about this fact. He also submits that a Show Cause Notice in this case was issued on 17 -3 -2008 demanding duty from 1 -2 -2003 to 31 -3 -2007 and as such is hit by time limitation and since there was no mala fide intention to evade service tax, they are not liable to any penalties in respect of these transactions.

(3.) LD . DR appearing for the Revenue submits that since the agreement between the RSMML and appellants clearly refers to the transportation/loading/un -loading of the goods it is clearly covered under Cargo Handling Services and since the appellants did not provide the separate value in relation to this activity of Cargo Handling Service department has raised the demand on entire value as per the agreement. With effect from 10 -9 -2004 the appellants are subsequently covered under the definition of Business Auxiliary Service under the category of production of goods on behalf of the clients and therefore Commissioner has rightly confirmed the demand against the appellants. He submits that appellants never approached the Department for any clarification. And therefore extended period has rightly been invoked by the Commissioner and penalty has been rightly imposed on the appellant.