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TMI Blog2010 (5) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... 31/- towards the education cess on the taxable values received towards providing technical testing and analysis services by the appellants during the period from 1-7-2003 to 31-3-2006 along with interest thereon apart from imposing penalty of equal amount under Section 78, besides penalty of Rs. 100/- per day of failure to pay the service tax subject to maximum of service tax amount demanded in terms of Section 76 of Finance Act, 1994. 3. Under order-in-original No. 27/2007, the Additional Commissioner had confirmed the demand of Rs. 12,62,622/- towards the Service Tax and Rs. 25,252/- towards the education cess on the taxable values received towards providing technical testing and analysis services by the appellants during the period from 1-4-2006 to 30-6-2007 along with interest thereon apart from imposing penalty of equal amount under Section 78, besides penalty of Rs. 100/- per day of failure to pay the Service Tax subject to maximum of Service Tax amount demanded. 4. The impugned orders are sought to be challenged on the following common grounds : "I. The learned Commissioner has not properly and adequately analyzed the agreement entered into between the appellants on the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to go through the statutory definition of technical testing and analysis as defined under Section 65(106) of the Act. Sri Raj was asked to go through point No. 1.2 of the agreement and state why the activity of MIDHANI for conducting of testing and evaluation of aero engine materials and components for AMTL does not fall under the classification of "Technical and Testing and Analysis" Sri Raj replied inter alia that AMTL is a separate entity owned by Defence Research and Development Organization and AMTL carries out various tests on materials on its own and MIDHANI had deputed only its staff to AMTL who work under the directions of AMTL along with the staff of AMTL. MIDHANI does not on its own carry out any testing or evaluation at AMTL but has only deputed its staff to AMTL. The testing activity is undertaken by AMTL as required. MIDHANI has no role to play in the manner in which the tests are required to be conducted at AMTL. It is purely the prerogative of AMTL to determine the course of the testing activity. Accordingly MIDHANI is not rendering any service under Technical Testing and Analysis as defined under Section 65(106) of the Act. V. The learned Commissioner ought to ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd since no such testing was done the demand is sued on the assumption is incorrect, improper and not legal. VIII. The learned Commissioner ought to have noticed that no contrary evidence exists to the answers given by Sri B.G. Raj to question No. 8 in respect of which the amounts received (paid to) by appellants shows clearly that the amounts received were towards the actuals in expenditure incurred for the salaries paid to the staff positioned at AMTL and expenditure incurred by the appellants for procurement of various equipments/materials requisitioned by AMTL. Therefore, it can be constructively seen from the facts and circum stances that the appellants had acted in a subordinate manner to the directions of the DRDO and the services rendered are at best in the nature of services rendered by an agent for which a certain payment is made since it cannot also be said by any stretch of reasoning that the amount paid is an amount payable to the appellants for providing any testing service. IX. The learned Commissioner ought to have noticed that from the re cords including bills raised by the appellants it can be easily seen that no bill was raised by appellants on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants was ever used, nor any persons of the appellants was ever used as persons of a testing agency. In this view of the matter the Commissioner's observation that AMTL is an extended arm of the appellants is anything but true, correct and proper. XII. The Commissioner has taken an uncharitable and incorrect view in respect of the pleading made by the appellants on the question of limitation. The appellants contended that in the facts and circum stances there is no suppression of any facts nor can it be said that any intention to evade payment of duty of tax can be surmised even. Nevertheless the Commissioner went in his own manner in discarding the plea on limitation and erroneously held that the appellants had intention to evade tax although the fact remains that the appellants never rendered any taxable service. XIII, The learned Commissioner (Appeals) failed to notice that the documented transactions between the appellants and AMTL of DRDO unequivocally disclose that no testing was done by the appellants in the AMTL of DRDO. He incorrectly assumed that testing was done by the appellants in AMTL and that AMTL is an extended arm of the appellants. The learned Commissioner ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts towards testing charges from AMTL in whatever manner and this fact proves the case more profoundly than the assumptions which persuaded the authorities to issue the incorrect show cause notice and pass incorrect orders. XVII. The learned Commissioner failed to notice that the appellants are a responsible Public Sector Undertaking, their accounts are subject to scrutiny by CAG besides the annual audit by Statutory Auditors and that the learned officers assumption that the appellants con ducted testing in AMTL is not supported by any credible evidence and, such being the case, the allegations made are bland, misdirected, and unjustifiably assumed, and therefore the entire demand, penalty are to be justifiably struck down. XVIII. The appellants crave leave to file further grounds which are in the nature of modified, altered or fresh grounds during the course of appeal proceedings." 14 At the outset, the learned Jt. CDR drawing our attention to the COD clearance submitted that, the proceedings in these appeals are not maintainable in view of the fact that the COD clearance is restricted to filing of the appeal on the limited point of quantum of the Service Tax payable on the serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Plain reading of the above decision of the Committee discloses that, permission granted to the appellants to file the appeal is restricted to the quantum of Service Tax payable on services in question, apart from specific rejection of the permission to file the appeal in relation to the liability to pay the Service Tax as well as interest thereon and the penalty imposed upon the appellants. 8. To the specific query as to the ground in relation to the quantum of the Service Tax, the learned advocate drew our attention to ground No. VI in Ser vice Tax Appeal No. 239 of 2008. The same has already been quoted above. Bare perusal thereof would disclose that, it essentially relates to the liability of the appellants to pay the Service Tax in relation to the services in question and not on the point of quantum of Service Tax. As no other ground has been pointed out relating to the quantum of tax, it obviously means that the appellants have not challenged the impugned orders on the ground of quantum of Service Tax. 9. The learned advocate for the appellants, however, has submitted that, since he is challenging the very liability to pay the Service Tax, it would include quantum of tax a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Corporation, Maharashtra Ltd. & Ors. reported in (2007) 7 SCC 39, a Division Bench of this Court has held that even a controversy between the Central and State Governments as well as their companies would also required an NOC from COD. For the aforestated reasons, we are of the view that the above judgments need reconsideration. We would have done so. However, we are unable to do so because the judgments in the case of ONGC (supra) have been delivered by Benches of three Judges of this Court. In the circumstances, the Registry is directed to place these matters before Hon'ble the Chief Justice of India for appropriate directions". 13. Apparently, the. Apex Court has not reviewed the decisions in Oil and Natural Gas Commission's cases (supra). It has merely directed that, the matters to be placed before the Hon'ble the Chief Justice of India for appropriate directions, while expressing opinion that the decision in Oil and Natural Gas Commission's cases (supra) needs reconsideration. That by itself cannot be construed to have overruled the decisions of the Apex Court in Oil and Natural Gas Commission's cases (supra). Till and until the matters are not placed before the appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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