TMI Blog2006 (9) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... leum Corporation Ltd. (hereinafter referred to as HPCL.), appear to have contravened the provisions of Sections 68, 69 70 of Chapter-V of the Finance Act, 1994 (the Act) and Rules 4, 6 7 of Service Tax Rules, 1994 in providing the taxable services without obtaining Service Tax registration, without filing statutory returns and without discharging due service tax liability. During the period 10-9-2004 to 15-6-2006, the appellants were required to pay service tax amounting to Rs. 13,09,297 (S. Tax Rs. 12,83,624/- + Ed. Cess Rs. 25,6573/- (sic) accrued on "business auxiliary services" and during the period 16-6-2005 to 12-9-2005 service tax amounting to Rs. 3,60,514/- (Service Tax Rs. 3,53,445/- + Ed. Cess Rs.7,069/-) accrued on "packaging services". However, the appellants have paid service tax on "packaging services". During the adjudication proceedings, the adjudicating authority has confirmed the Service Tax amounting to Rs. 16,69,811/- alongwith interest. Penalties of Rs. 16,69,811/-, Rs. 16,69,811/- and Rs. 1,000/- under Sections 76, 77 and 78 respectively of the Finance Act, 1994 were also imposed upon the appellants. 3. Being aggrieved the appellants have filed the ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gas was LPG and it is that very LPG which was refilled in the cylinders. There was absolutely no change in the characteristic of LPG gas post its bottling in cylinders. The compression of LPG was necessary at the stage of removal from big containers to force the gas into cylinders and not for any other purpose; that the activity of appellants does not amounts to manufacture under the excise law and yet has demanded service tax on the activity of bottling under the head "business auxiliary service" on the finding that the appellants produced gas on behalf of HPCS. If any activity does not amount to manufacture, there can be no question of production of any goods. 3. That since the appellants had not produced any gas on behalf of HPCL, the activities stated in para 4.6 of the impugned order cannot be subjected to service tax under the head "business auxiliary services". In fact the adjudicating authority has himself accepted that activities mentioned in para 4.6 were incidental activities. If main activity i.e. bottling of LPG hi cylinders is not embraced within the taxable description "business auxiliary services", there can be no question of subjecting its ancillary activities t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. (d) The SCN proposes penalty under Sections 76, 77 78 of Finance Act, 1994. The invocation of three Sections together in SCN itself vitiates the penalty proposed in SCN. Section 77 will apply for contravention of any provision for which no penalty is provided. If Section 76 applies obviously Section 77 cannot be recoursed to by the department. The condition precedent for invocation of Section 76 are the allegation mentioned in clause (a) to (e) but as aforesaid there is no allegation qua clauses (a) to (d). Clause (e) cannot have independent existence in the absence of allegation about fraud, collusion etc. (e) The appellant is not liable for any penalty in view of the decision of Supreme Court in the case M/s. Amrit Foods v. CCE - 2005(190) E.L.T. 433 read CEGAT Final Order Nos. 521-522/06 SM = 2006 (206) E.L.T. 970 (T) dated 27-2-2006. 5. That the appellants is not liable for any penalty in the facts and circumstances of this case. Mere failure to register with the department under the category of Business Auxiliary Service w.e.f. 10-9-2004, when the assessee bona fide believed that the said provision is not attracted, would not tantamount to suppression of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant appeared on 24-8-2006 on behalf of the appellants and reiterated the grounds of appeal. He has also submitted written submissions dated 24-8-2006 which have been taken on record. 5. I have carefully gone through the appeal papers and submissions made at the time of personal hearing. Precisely the issue before me to decide is whether the Service Tax is leviable on bottling of LPG Gas in Cylinders under the head "Business Auxiliary Service" during the period 10-9-2004 to 16-6-2005 or not. 6. The revenue has confirmed the demand of Service Tax under the category of "Business Auxiliary Services" on the premise that compressing and refilling of LPG Gas in Cylinders tantamount to production of gas in cylinders and this production activity done by the appellants on the behalf of their client i.e. M/s. HPCL, is covered under category of "Business Auxiliary Services" under clause (v). On the other hand the appellants have pleaded in their defence that bottling is not exigible to Service Tax prior to 16-6-2005. There contention is that had these "bottling charges" are covered by the specific entry "Business Auxiliary Services" earlier there was no need to bring it under the new ..... X X X X Extracts X X X X X X X X Extracts X X X X
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