KIOCL LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, BANGALORE

JUDGEMENT

(1.) THIS application of the appellant seeks waiver and stay in respect of the adjudged dues including an amount of Rs. 1,74,13,495/ - demanded as Service Tax and education cesses for the period from January, 2005 to March, 2007 and the penalty of Rs. 2 crores imposed under Section 78 of the Finance Act, 1994. On a perusal of the records and hearing both sides, we find that the entire demand of Service Tax and cesses is under the head "Business Auxiliary Service (BAS)" and the same has been worked out in the reverse charge mechanism. We further find that the appellant's plea that there can be no demand of Service Tax on 'BAS' received from abroad for any period prior to 18 -4 -2006 was not accepted by the adjudicating authority. We further note that the appellant deposited an amount of Rs. 18,72,360/ - (albeit under protest), which amount is higher than the amount of Service Tax and cesses demanded for the period from 18 -4 -2006. In view of the Hon'ble Bombay High Court's judgment in the case of Indian National Shipowners Association ( : 2009 (13) S.T.R. 235 (Bom.)) as affirmed by the Hon'ble Supreme Court ( : 2009 TIOL 129 SC S.T. : 2011 (21) S.T.R. 3 (S.C.)) which has since been accepted by the C.B.E. & C. vide F. No. 276/8/2009 -CX. 8A, dated 26 -9 -2011. We have found prima facie case for the appellant against a major part of the impugned demand of Service Tax and education cesses. In this scenario, after dispensing with pre -deposit, we proceed to deal with the appeal itself, having noted non -application of mind on the part of the adjudicating authority to a crucial plea made by the appellant. The learned consultant for the appellant has pointed out two crucial aspects of the impugned adjudication.

(2.) WE have also heard the learned Commissioner (AR) who has fairly acknowledged the fact that the Hon'ble Bombay High Court's judgment in Indian National Shipowners Association case has been accepted by the C.B.E. & C. vide Circular dated 26 -9 -2011 ibid and that no findings were recorded on the aforesaid plea of the assessee regarding certain transactions for the period after April, 2006.

(3.) FOR the period from 18 -4 -2006, the learned Commissioner is requested to readjudicate the issues in accordance with law and the principles of natural justice. It is made clear that all the contentions raised by the assessee shall be duly considered and appropriate findings recorded thereon. The appeal is allowed insofar as the demand of Service Tax and education cesses, order for recovery of interest and imposition of penalties for the period prior to 18 -4 -2006 are concerned. The appeal is allowed by remand to the adjudicating authority for de novo adjudication and decision on similar issues for the period from 18 -4 -2006. The stay petition also stands disposed of.