KURELE INDUSTRIES Vs. CCE

JUDGEMENT

(1.) A Show Cause Notice was issued proposing demand of tax on the Appellant as "Clearing and Forwarding Agent" under Section 65(25) of the Finance Act, 1944. The Adjudicating Authority confirmed the demand of tax of Rs. 1,16,741/ - and imposed consolidated penalty of equal amount on Appellants under Section 76 and 78 of the Act. The Commissioner (Appeals) set aside the Adjudication order. The relevant portion of the order of the Commissioner (Appeals) is reproduced below:

(2.) In the present case, the appellants arranged orders for the principal and also undertake the responsibility/guarantee of payment and interest, in case of delayed payment or if the cheque is not honored. Thus, I am of the opinion that the services rendered by the appellants are covered under the definition of "Commission Agent'. Since the demand relates to the period 2001 -2002 and 2002 -2003 and this category has been brought under taxable net w.e.f. 14.5.04, I hold that demand is not sustainable.

(3.) AFTER hearing both the sides and on perusal of the record, I find that the Commissioner (Appeals) held that the Appellants are covered under the definition of "Commission Agent" and the demand of tax is not sustainable. It is seen that the order of the Commissioner (Appeals) was not challenged by the Revenue before the Appellate Authority. As the demand of tax is not sustainable, enhancement of penalty by the Revision order is also not maintainable.