PANKAJ OIL TRADING CORPORATION Vs. CCE

JUDGEMENT

(1.) THE appellant challenges the order of the Commissioner (Appeals) to the extent that it imposes reduced penalties under Sections 76 and 77 from Rs. 1,59,258/ - to Rs. 25,000/ - and Rs. 15.100/ - to Rs. 4,000/ - and confirms the penalty of Rs. 1,59,258/ - imposed by the adjudicating authority under Section 78 of chapter V of the Finance Act, 1994. The appellant was a service tax provider in the category of 'Clearing and Forwarding Agent' registered under Section 69 of the said Act having registration number CFA/AHD -I/131 dated 18.2.2002.

(2.) A show cause notice was issued to the appellant on 7.11.2002 alleging that the noticee was receiving the goods (lubricants) from the premises of their principal IOC Limited, Mumbai, warehousing these goods, providing security for them and maintaining the account for the receipt and dispatch of the same. It was also alleged that the appellant was providing these services both as Dealer Operated Lube Godown (DOLG) and thereafter as an ad hoc CFA (clearing and forwarding agent). The appellant had received Rs. 31,85,157/ - as commission for the period from 01.09.1000 to 31.06.2001 as DOLG and was liable to pay service tax of Rs. 1,59,258/ - at 5%. It was also alleged that he had received commission of Rs. 24,93,148/ - for service rendered as ad hoc CFA during the period from 1.07.2001 to 31.12.2001 and was liable to pay service -tax of Rs. 1,24,657/ - at 5%, totaling Rs. 2,83,915/ -. It was further alleged that even after obtaining registration, the appellant has not paid service tax due on the amount of services rendered by the firm as DOLG operator for the period from 01.07.1999 to 30.06.2001, although it paid tax of Rs. 1,24,657/ - on the taxable amount received as an ad hoc CFA for the period from 01.07.2001 to 31.12.2001. It was alleged that the appellant did not file any service tax returns in the form ST -3 returns for the period from 01.09.2001 to 31.12.2001 and they were filed much later.

(3.) THE Assistant Commissioner, on the basis of the material on record and considering the stand taken by the appellant, found that the appellant was providing taxable services of a clearing and forwarding agent and though it had paid service tax and interest due thereon on the amount of commission received as an adhoc CFA, it had not paid the service tax of Rs. 1,59,258/ - on the taxable value of Rs. 31,85,157/ - received as DOLG commission for the earlier period from 01.09.99 to 30.06.2001. It was found that the appellant had failed to file correct prescribed half yearly ST -3 returns for the period 01.09.1999 to 31.03.2002. It was held that since there was failure/omission on the part of the appellant justifying invocation of the extended period of limitation of five years for assessment under Section 73(a) of the said Act. The Assistant Commissioner found that the appellant had failed to disclose the value of taxable service and suppressed it and thereby evaded the service tax by not filing the returns under Section 70 of the Act and the Rules framed thereunder for the said period and therefore was liable to be penalty under Section 78 of the Act. The adjudicating authority confirmed the demand of Rs. 2,83,950/ - of service tax under Section 68 and adjusted the amount of Rs. 1,24,659/ - already paid on 25.02.2002 and imposed penalties of Rs. 15,100/ - under Section 76, Rs. 1000/ - per return (total Rs. 2000/ - under Section 77, for failure to file prescribed service tax returns on two occasions namely, September 2001 and March 2002), imposed penalty of equal amount of Rs. 1.59.258/ - for suppressing or concealing the value of taxable services under Section 78 of the Act, imposed penalty of Rs. 500/ - under Section 75A of the Act and ordered payment of interest.