CLEARCHEM AGENCIES Vs. COMMISSIONER OF CENTRAL EXCISE, INDORE

JUDGEMENT

(1.) THE appellant are a Clearing & Forwarding Agent. The period of dispute in this case is from April, 2002 to September, 2006. During this period, they were providing C & F Agent services and also the services of the packaging to M/s. Tata Chemicals Ltd., Mumbai. There is no dispute in respect of the Service Tax on the packaging services. The dispute is only in respect of the value of the C & F Agent Services. The department's allegation is that during the period of dispute, the appellant were not paying Service Tax on payment received under following heads: -

(2.) SHRI Manish Saharan, Advocate, ld. Counsel for the appellant, pleaded that the expenses incurred for providing C & F Agent's services which were being reimbursed to the appellant by their principals are not includible in the assessable value of the services, that in this regard he relies upon the judgments of the Tribunal in the case of Al -Baith Steel (P) Ltd. reported in : 2008 (10) S.T.R. 554 (Tri. -Bang.) and S & K Enterprises v. CCE, Calicut reported in : 2008 (10) S.T.R. 171 (Tri. -Bang.) and also the stay order passed by the Bombay Bench of the Tribunal in the case of Y.N. Warehousing Company v. CCE, Nagpur reported in : 2013 (32) S.T.R. 251 (Tri. -Mumbai), wherein the Tribunal in respect of the period prior to introduction of Service Tax (Determination of Value) Rules, 2006, taking into account the Board's Circular No. 341/11/98 -TRU, dated 23 -8 -1999 had taken a prima facie view that only the commission received by the C & F Agent would be chargeable to Service Tax and had granted unconditional waiver and that in view of this, in respect of the present appeal, where the period of dispute is prior to 19 -4 -2006, the Service Tax would be chargeable only on the commission and not on the reimbursement of actual expenses and as such, the impugned order is not correct. He pleaded that the Tribunal's judgment in the case of Y.N. Warehousing Company (supra), though a stay order, is squarely applicable to the facts of this case. He also pleaded that the period of dispute in this case is from April, 2002 to September, 2006, while the show cause notice was issued only on 31 -3 -2007 by invoking the extended period, that the extended period under proviso to Section 73(1) of the Finance Act is not invokable inasmuch as in view of the conflicting judgments on the issue involved in this case, it cannot be alleged that the appellant had deliberately contravened the provisions of Finance Act, 1994 and the Rules made thereunder with an intent to evade Service Tax and in this regard he relies upon the judgments of the Apex Court in the cases of Continental Foundation Joint Venture v. CCE, Chandigarh -I reported in : 2007 (216) E.L.T. 177 (S.C.) and Uniworth Textile Ltd. v. CCE, Raipur reported in : 2013 (288) E.L.T. 161 (S.C). He, therefore, pleaded that bulk of duty demand is time barred and for the same reason, penalty under Section 78 would not be imposable. As regards the Service Tax on packaging service, he stated that the same is not being contested.