TMI Blog2010 (5) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... al No. 10/2008, the Commissioner (Appeals) has dismissed the appeal filed against the order-in-original No. 26/2007 dated 15th October, 2007 passed by the Additional Com missioner, Hyderabad. By order-in-appeal No. 11/2008, the Commissioner (Appeals) has dismissed the appeal filed against the order-in-original No. 27/2007 dated 15th October, 2007 passed by the Additional Commissioner, Hyderabad. 2. By order-in-original No. 26/2007, the Additional Commissioner, Hyderabad, had confirmed the demand of Rs. 29,25,256/- towards the Service Tax and Rs. 43,131/- 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 value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer, viz., The Addl. General Manager (F A), the Commissioner ought to have seen that there is no contra evidence (it does not exist) to this averment. Therefore, the Commissioner's observation that the appellant ha given technical assistance and testing facility to DRDO is entirely incorrect and improper as being unfactual. IV. The learned Commissioner has over looked the answer to question No. 4 which was put to Sri 13.G. Raj referring to point No. 1.2 of the agreement about the scope of the agreement in relation to testing services and asking him 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the Revenue Expenditure nor even the 6% could be part of any amount representing any consideration towards any testing service. VII. The Commissioner ought to have seen from the facts on record that it is case of rendering service by AMTL for its own objectives and the role of the appellant is neither a role of a testing agency nor a role of a man power agency. Nor can it be said that it has rendered any maintenance service. In any case since the authorities have classified the assistance given by the appellants as "technical testing and analysis" and 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 circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... othing but a ex tended arm of the appellant. It is respectfully submitted that nothing can be farther from truth. The appellants say that the Commissioner's observation is based only on his unfounded presumption and not on the basis of facts which abundantly clearly show that the entire amount for the entire infrastructure was borne by DRDO and all the operations and maintenance relating to AMTL are administered and monitored by DRDO and that the appellants had not rendered any expertise as a Technical Testing and Analysis Agency and that no machinery of the appellants 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o comprehend that the assistance it was rendering to AMTL as per agreement would warrant it to be classified as any taxable service. This is also apart from the fact that there is no testing nor any advice in regard to that service by the appellants in any manner whatsoever. In these circumstances the invocation of longer period attributing mala fides is entirely unwarranted, improper and not correct. XVI. The learned Commissioner also ought to have noticed that as explained in the facts detailed and the ground set forth the appellants had never received any amounts 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, misdirect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded conducting of testing and evaluation of aero-engine material and components required for the Kaveri engine project which were covered by the category of technical testing and analysis services taxable from 1-7-2003. It declined permission to the company to pursue the appeal in respect of its liability to pay service tax along with penalty and interest. It permitted the company to agitate the issue of the quantum of service tax payable on the services in question before CESTAT as the department might have taxed the value of material procured by the company also." 7. 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 abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d.'s case, reported in 2010 (253) E.L.T. 355 (S.C.) = 2010-TIOL-41- SC-CX, particularly to the following observations by the Apex Court therein: "In the circumstances, we find merit in the submission advanced before us by the learned Attorney General that time has come to revisit the orders passed by the three Judge Bench in the case of Oil Natural Gas Commission v. Collector of Central Excise (supra). One more order needs to be highlighted because, in our view, even that order needs to be revisited. In the case of Oil Natural Gas Commission v. City Industrial Development 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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