GARIBDASJI DISTRIBUTORS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE assessee's appeal is against demand of service tax of Rs. 74,182/ - for the period 01.07.2000 to 31.03.2003, interest on tax amounting to Rs. 10,611/ - and penalties imposed under Sections 76 and 78 of the Finance Act, 1994 amounting to Rs. 10,000/ - and Rs. 35,343/ - respectively. The Revenue's appeal is against reduction of the Section 76 -penalty to Rs. 10,000/ -.

(2.) AFTER examining the records and hearing both sides, I note that, during the above period, the assessee had, on commission basis, received goods from a Mumbai -based manufacturer, sold it to buyers on behalf of the manufacturer, transmitted the sale proceeds to the manufacturer and received commission from the manufacturer for these services. They did not pay any service tax in respect of the amount of commission received from the manufacturer. However, before and during the course of departmental investigations into the above transactions, the assessee paid service tax of Rs. 55,084/ -. In the subsequent show -cause notice, the department raised a demand of differential tax by adding to the taxable value certain amounts of expenses reimbursed to the assessee by their principal (manufacturer). This notice also proposed to levy interest and to impose penalties. In their reply to the show -cause notice, the assessee denied the department's allegation that they had rendered "Clearing and Forwarding Agents' Service" to their principal. They submitted that they were only acting as "consignment agents" and were not liable to pay service tax in this category for the aforesaid period. They also contested other proposals made in the show -cause notice. In adjudication of the dispute, the original authority passed the following order:

(3.) I appropriate an amount of Rs. 10,611/ - paid by them on various dates towards interest on delayed payment. They are directed to pay the balance interest immediately.