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2014 (11) TMI 1057 - COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE (APPEALS), MYSOREWhether the impugned order has gone beyond the scope of both the SCNs or not - Appellant providing services such as asset management and fund management - Held that:- it is not discernible acting on material or basis which is not alleged/brought to the notice of the opposite party cannot be done, as is obvious and well known. No material can be relied upon behind Appellant’s back, as has been done in this case. It is made in violation of the salutary principles of natural justice. Therefore, the Impugned Order by relying on such extraneous material has clearly exceeded and travelled beyond the allegation made in both the SCNs and it cannot be done. Tenability of demand for the period 2007-08 to March, 2013 - Major portion of the demand relates to Discounting charges and a small portion of which relates to commission earned on sale of Mutual funds and service charges - Held that:- there is not a semblance of consideration, discussion and finding, with material evidence in support, recorded by the Lower Authority in this regard in the Impugned Order, as was essential - yet the liability has been invoked and confirmed against them, in abstentia, as it were thus (non-discussion of material defence submission). Such casual non-consideration made would fail, as is obvious. It is against the salutary principles of natural justice also (‘right to effective representation’). The law in this regard is clear and well settled. It cannot be done. It goes to the root of the issue involve. By applying the decisions in the cases of CCE v. N.M. Nagpal (P.) Ltd. [2006 (5) TMI 49 - SUPREME COURT] and Alpic India v. CCE [2006 (3) TMI 681 - CESTAT, MUMBAI], the impugned order fails entirely, without prejudice and the liability after 30-6-2012 is dropped with respect to commission earned by the appellant as per Notfn. No. 25/2012-S.T., dated 20-6-2012. Tenability of interest and penalties imposed - Held that:- as there exists no duty liability on appellant in terms of the Impugned Order, its attendant consequences follow as a matter of course. No interest under Section 75 of the FA would be payable by them as ordered therein. Also, no penalties would be imposable on them, similarly. By relying on the decision of Hon'ble Supreme Court in the case of Balakrishna Industries v. CCE [2006 (8) TMI 182 - SUPREME COURT OF INDIA], the interest and penalty imposed is not tenable. Whether commission received by distributors of mutual fund company are in the nature of commission chargeable to ST under BAS or BOFS or not - Appellant urged that the ST on commission would be liable under BAS and they have not taken this point before the Lower Authority and is taken only during the Personal hearing - Held that:- even though, appellant have not taken up this issue before the Lower Authority, this being question of law, nothing bars them from raising the issue during Personal hearing. The Lower Authority being bound to follow the Board’s Circular No. 96/7/2007-S.T., dated 23-8-2007, has however failed to do so. . There is absolutely no reference made by him to this Circular also. He cannot do so. No reason is also discernible on record for his inaction and failure in this regard. Without prejudice, even if they have not taken this ground as their defence, the Lower Authority in the given circumstances was duty bound to consider the same, as the onus lies on him also in this regard. However, surprisingly and shockingly, the Lower Authority has demanded and confirmed the ST liability of commission earned on sale of Mutual Funds under BOFS and not under BAS, as is evident. The entire liability in the Impugned Order stood under the Commission received by the appellant on sale of Mutual Funds otherwise as per the records, they would have been well under the threshold limit of ₹ 10 lakhs. Accordingly, the whole foundation of the case collapses on this ground, without prejudice. Eligibility of refund of ST amount and interest paid thereon - Held that:- as the appellant are well within the threshold limit of ₹ 10 lakhs, they would not liable for ST. However, they have paid the ST liability along with respective interest before the issuance of the Impugned Order, therefore, eligible for refund of the same with consequential relief - Decided in favour of appellant
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