HARISH ANEJA Vs. CCE, MEERUT-II

JUDGEMENT

(1.) THESE are two appeals one filed by M/s. Harish Aneja and others (hereinafter to as referred to as assessee) and second filed by Revenue against same order in Original No. 02/Commissioner/M -II/2008 dated March 17, 2008. Brief facts of the case are that assessee was appointed as depot operator for distribution, marketing and sale of country liquor products to retailers by M/s. Kesar Enterprises Ltd., M/s. Majhola Distillery and Chemical Works (MDCW) and National Industrial Corporation Ltd. (NICL). It was found that assessee has provided taxable service but has not paid service tax on the taxable service. Matter was investigated in detail by Central Excise Officers by examining various agreements, records invoices issued and statements of various persons were recorded and thereafter a show -cause notice dated October 23, 2006 was issued to the assessee demanding service tax of Rs. 98,66,279 along with interest and also proposing penalties under sections 75A, 76, 77 and 78 of the Finance Act, 1994. After due process, show -cause notice was adjudicated vide impugned order in which demand of Rs. 98,66,270 was confirmed along with interest and following penalties were imposed on assessee:

(2.) ABOVE order in original is challenged by the assessee in the present appeal. Revenue has challenged the impugned order on the ground that up to April 17, 2006 penalty is imposable at Rs. 200 per day as imposed by the Commissioner in the impugned order but with effect from April 18, 2006 till date of payment penalty is imposable at two per cent of outstanding tax amount per month till such failures continues as the same is higher the Rs. 200 per day and is mandatory under section 76 of the Act.

(3.) AFTER hearing both sides and examining the case records we find that in case of (MDCW) demand relates to period 2003 -04 to 2005 -06 based on the agreement date June 13, 2003, April 17, 2004 and March 24, 2005. M/s. Rajni Aneja and others (Association of persons) has purchased CLP during the 2004 -05 assessee also submitted sample bills before Commissioner during the course of personal hearing on November 13, 2007 and submitted that they are purchasing the goods in the name of individual AOP and then selling CLP through their shops. From the adjudication order it is not clear how many bills were produced before the Commissioner and examined by him. From the copies of bills submitted before us we find that all bills are in name of M/s. Rajni Aneja and others and name of licensee is also shown M/s. Rajni Aneja and others. It is the submission of the assessee that CLP was purchased by them and thereafter it was sold by them. In such a case how the service is classifiable as C and F service or "business auxiliary service" (BAS). The Commissioner has not examined this aspect. Moreover show -cause notice has been issued to the assessee for classifying service as C and F service whereas a Commissioner in case of MDCW has held that assessee has provided BAS to MDCW with effect from July 1, 2003 and confirmed the demand.