C.J. SHAH & CO. Vs. CCE

JUDGEMENT

(1.) THIS appeal is against order of confirmation of demand for service tax under the category of Business Auxiliary service, interest thereon and imposition of penalties on the Appellants.

(2.) THE facts leading to the present appeal are as follows.

(3.) THE purchasers to whom the goods are sold while in the customs bonded warehouse, place purchase orders on the Appellants indicating therein the quantity and the price or rate at which the goods are agreed to be purchased. For effecting the imports of the goods, the Appellants incur various expenses towards service provided by various service providers to the Appellants such as expenses towards Banking and L/C (letter of credit) charges, wharfage, surveyor's fees, etc. The Appellants while raising the invoices on the purchasers, split the price mentioned in the purchaser orders and issue a separate debit note towards such expenses incurred by the Appellants. To take an illustrative transaction which is at Exhibit A to the Appeal, the Appellants imported a consignment of 286.415 M.Tons of 'Methyl Ethyl Ketone' in May 2008 and filed warehousing bill of entry no.243376 dated 29 -5 -2008. While the goods were in warehouse, the Appellants sold 16 M.tons out of the said goods to R.A.Nariman & Co P. Ltd who cleared the said 16 M.tons by filing ex -bond bill of entry. The said purchaser, R.A.Nariman & Co. P. Ltd had placed purchase order dated 14 -6 -2008 on the Appellants, as per which the goods were agreed to be purchased at the rate of Rs.87.50 per kg.. While raising the Invoice, the Appellants split the price into two viz.Rs.9,34,597/ - and Rs.3,88,859/ - and issued a separate debit note for the amount of Rs.3,88,859/ - towards expenses incurred by the Appellants for Banking, L/C charges etc. In other words the said expenses were factored in the said rate of Rs.87.50 per kg and a separate debit note was issued by the Appellants for the same.