METRO MOTORS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE relevant facts of the case, in brief, are that the appellant is authorized dealer of M/s. Hero Honda Motors Ltd. They are registered with the Service Tax authorities. It was found that the appellants were engaged in providing services as Direct Selling Agents of various banks including ICICI Bank in their premises. According to the Revenue, the appellant was liable to pay Service Tax under the category of Business Auxiliary Service. During the investigation, the appellant at the instance of the visiting officers, deposited an amount of Rs. 6,85,200/ - through TR -6 challan dated 19 -9 -2005. A show cause notice dated 25 -9 -2008 was issued proposing demand of Service Tax of Rs. 6,07,032/ - under the category of Business Auxiliary Service for the period 1 -7 -2003 to 27 -8 -2005. It was also proposed to appropriate the amount deposited by them along with interest during the investigation. The adjudicating authority confirmed the demand of duty along with interest and penalties. The Commissioner (Appeals) modified the adjudication order to the extent the demand of Service Tax was reduced to Rs. 4,43,192/ -. He has also appropriated the said amount along with interest and penalty against the deposit made by the appellant. The Revenue challenged this order of Commissioner (Appeals) before the Tribunal. The appellant has also filed a cross -objection against the appeal of the Revenue. The Tribunal vide Final Order Nos. A/1355 -1356/WZB/AHD/2011, dated 28 -7 -2011 rejected the appeal filed by Revenue and the cross -objection filed by the appellant was allowed by setting aside the penalty imposed under Sections 77 & 78 of the Finance Act, 1994. Thereafter, the appellant filed a refund claim of Rs. 2,66,907/ - as deposited by them during the investigation. The adjudicating authority sanctioned and paid a refund of Rs. 2,66,907/ -. Revenue filed appeal before the Commissioner (Appeals). By the impugned order, the Commissioner (Appeals) set aside the Adjudication order and Department's appeal was allowed. Hence, the appellant filed this appeal. Ld. Advocate on behalf of the appellant submits that the appellant deposited this amount during investigation. They have not paid any Service Tax and therefore, Section 11B of Central Excise Act, 1944 would not be applicable. He relied upon the decision of the Tribunal in the case of Bajaj Auto Ltd. v. CCE, Aurangabad -, 2007 (6) S.T.R. 356 (Tri. -Mum.) and M/s. Foods, Fats & Fertilizers Ltd. v. CCE, Guntur -, 2010 (20) S.T.R. 482 (Tri. -Bang.). He further submits that Hon'ble Supreme Court in the case of Union of India v. Suvidhe Ltd. -, 1997 (94) E.L.T. A159 (S.C.) dismissed the appeal filed by the Revenue on the identical issue.

(2.) Learned Authorised Representative on behalf of the Revenue reiterates the findings of the Commissioner (Appeals). He submits that it is not a deposit, as the adjudicating authority already appropriated the amount against the demand of Service Tax. So, it is a payment of Service Tax and Section 11B of the Act, 1944 would be governed. He relied upon the decision of the Tribunal in the case of United Spirit Ltd. v. CC (Import), Nhava Sheva -, 2008 (228) E.L.T. 360 (Tri. -Mum.). He also relied upon the decision of Hon'ble Supreme Court in the case of Mafatlal Industries Ltd. v. Union of India - : 1997 (89) E.L.T. 247 (S.C). Learned Authorised Representative on behalf of the Revenue also submits the decision relied upon by ld. Advocate in respect of Hon'ble Supreme Court would relate to pre -deposit under Section 35F, which is not applicable in this case.

(3.) AFTER hearing both the sides and on perusal of the records, I find that a show cause notice was issued proposing demand of Service Tax of Rs. 6,07,032/ - for the period 1 -7 -2003 to 27 -8 -2005 under the category of Business Auxiliary Service. It is seen from the show cause notice that the appellant during investigation, deposited an amount of Rs. 6,85,200/ - through TR6 challan dated 19 -9 -2005. The adjudicating authority appropriated the said amount against the demand of duty. Commissioner (Appeals) modified the adjudication order and reduced the demand of duty and accordingly the proportionate deposit was appropriated against the said demand. This fact was not disputed by the Department.