KARAN AGENCIES Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) HEARD both sides. The appellants filed these appeals against the adjudication orders dated 30 -3 -2012 and 11 -1 -2013 whereby demands of Rs. 4,39,66,593/ - and Rs. 85,40,423/ - respectively are confirmed with interest on the ground that the appellants had provided business support service. The adjudicating authority also imposed penalties.

(2.) THE brief facts of the case are that the appellants entered into an agreement with M/s. Kolhapur Sugar Mills Ltd. for managing the business of distillery division and country liquor division. Show cause notices were issued demanding Service Tax on the ground that the appellants provided business support service to M/s. Kolhapur Sugar Mills Ltd. The adjudicating authority confirmed the demands and imposed penalties.

(3.) FURTHER contention is that as per the terms and conditions of the agreement with M/s. Kolhapur Sugar Mills Ltd., the appellants are to pay Rs. 30 lakhs per annum for use of plant and machinery of the distillery units. The profit and loss in respect of manufacture and sale of products produced in the distillery is on account of the appellants. The appellants are not receiving any amount from M/s. Kolhapur Sugar Mills Ltd. As the appellants have undertaken the activity of manufacture and distribution of the products manufactured in the distillery division, therefore it cannot be said that the appellants have provided any business support service to M/s. Kolhapur Sugar Mills Ltd. The appellants relied upon the definition of 'business support service, as provided under the Finance Act. In these circumstances, the contention is that the demand is not sustainable.