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2015 (7) TMI 891 - CESTAT AHMEDABAD

2015 (7) TMI 891 - CESTAT AHMEDABAD - TMI - Demand of service tax - Business Auxiliary Services - benefit of exemption Notification No 13/2003-ST dated 20.6.2003 - held that:- Adjudicating Authority vide Order dt 31.8.2006 in first appeal observed that in terms of the different clauses of the agreements, the appellants were providing after sales service in relation to the equipments sold to the clients within the appellants territory, installation, maintenance, care etc., of such equipments whic .....

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omer Care Service provided on behalf of the client or any incidental or auxiliary support service such as billing, collection or recovery of cheques/accounts and remittance, evaluation of prospective customer and public relation service.

The show cause notice dtd 1.9.2004 was issued for the period 1.7.2003 to 31.3.2004 proposing demand of tax under the category of BAS. But, the second show cause notice dtd 21.10.2004 was issued for the period October 1999 to June 2004 proposing the de .....

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nd after determining the facts of the case in proper manner, the classification of the service would be decided. It should be noted that reasons are the links between the materials on which certain conclusions are based and the actual conclusions. So, both the impugned orders cannot be sustained. - Decided in favour of assessee. - Appeal No. : ST/2/2006, ST/10408/2013 - ORDER No. A/11073-11074/2015 dtd 22/7/2015 - Dated:- 22-7-2015 - Mr. P.K. Das and Mr. P.M. Saleem, JJ. For The Assessee : Shri .....

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d by the Asstt. Commissioner, Central Excise & Customs, Anand, proposing a demand of Service Tax alongwith interest and to impose penalty under the category of Business Auxiliary Services (BAS) for the period 1.7.2003 to 31.3.2004. The show cause notice was issued on the basis of agreement between the appellant and one of the clients viz., M/s EIMCO Elecon (I) Ltd, Vallabh Vidyanagar. 2.1 Officers of the DGCEI, Regional Unit, Vadodara, investigated the matter and a show cause notice dated 20 .....

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er, Central Excise & Service Tax, Vadodara-I decided the show cause notice dtd 1.9.2004 and confirmed the demand of Service Tax alongwith interest and imposed penalties under the Finance Act 1994. The demand of Service tax was confirmed under the category of Business Auxiliary Service and denied the benefit of exemption Notification No 13/2003-ST dated 20.6.2003 as claimed by the appellant. The appellant filed appeal No ST/2/2006 (in short 1st appeal) against the impugned adjudication order .....

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he impugned adjudication order dtd 31.12.2012. 4. The Learned Advocate on behalf of the appellants submits that they were rendering services to their clients as Commission Agent for the purpose of sale of the goods. They entered into agreement with their clients as Commission Agents, which was termed as Dealers Agreement. The agreement would clearly indicate that they were rendering the services to their clients as Commission Agent for the purpose of sale of goods and there was incidental activi .....

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ting Authority denied the benefit of exemption notification on the ground that the incidental activities in relation to the sale of the goods are predominant nature, which is contrary to the various decisions of the Hon ble Supreme Court and Tribunals as under: i) Philips (I) Ltd vs Collector of CE, Pune [1997(91)ELT.540 (SC)] ii) Assam Small Scale Ind. Dev.copn. Ltd & Others Vs J D Pharmaceuticals in their judgment [AIR2006SC131 dated 7.10.2005] iii) Premier Enterprises vs CCE, Hyderabad [ .....

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so submits that Notification No 13/2003-ST (supra) covers all the services under the definition of BAS. He submits that without prejudice, the imposition of penalty is not warranted, as the issue involved the classification of the service and claim of benefit of exemption notification. 4.3 In respect of appeal No. ST/10408/2013 ( i.e., 2nd appeal) the Learned Advocate submits that in the earlier show cause notice, the adjudicating authority confirmed the demand of Service Tax under the category .....

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ature of activities would prevail rather than incidental activities. He relied upon the decision of the Hon ble Supreme court in the case of Super Poly Fabirics Ltd Vs CCE, Punjab [2008(10) STR.545(SC)]. 4.4 The entire demand of tax is barred by limitation. It is clearly evident from the record that the Dept was well aware of the activities of the appellant as per earlier show cause notice dtd 1.9.2004 which is issued for the normal period. 4.5 He relied upon the decision of the Tribunal in the .....

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Authorities. He drew the attention of the Bench to the agreements between the parties. He submits that Clause 5 of the agreement dtd 1.1.2003 would clearly show that the appellant discharged activities of the sales and the service. Thus, it is not a case of mere agreement of sales. He further drew the attention of the Bench to Clause 7 of the agreement. It is submitted that the after reading the clauses of the agreement, it is not only for sales of the goods, but also for various services, inst .....

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re the Bench. It is stated in the said letter that the demand of tax for the period prior to 1.7.2003 would be classifiable under C&F Agent Service and the subsequent period would be classifiable under BAS Services which was introduced in the Service Tax net on 1.7.2003. 5.2 He submits that the Adjudicating Authority had given clear finding that the appellants were maintaining warehouse in 14 locations for storing the goods and employed 250 persons. The facts of the case would show that the .....

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ration was paid for storing and handing of the goods. 7. After hearing both the sides and on perusal of the records, we find that the Adjudicating Authority vide Order dt 31.8.2006 in first appeal observed that in terms of the different clauses of the agreements, the appellants were providing after sales service in relation to the equipments sold to the clients within the appellants territory, installation, maintenance, care etc., of such equipments which are major components of the services, to .....

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e client or any incidental or auxiliary support service such as billing, collection or recovery of cheques/accounts and remittance, evaluation of prospective customer and public relation service. 8. In the second appeal, the Adjudicating authority vide order dtd 31.12.2012, observed that the appellant provided facility for storage of goods manufactured by the principals with the help of 250 personnel posted in 14 branches all over India. They were executing the instructions of the principals. Th .....

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ring and forwarding, in a typical situation of C&F agents are appointed in outstation location by manufactures of whole sales distributors, so that they may clear the goods, stored them and then forward the goods according to their instructions as per the owner. 9. On perusal of the findings of the Adjudicating Authorities in both the appeals, we are unable to understand the facts of the case in so far as the activities of the appellants for the purpose of determining the classification of t .....

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f the goods. It is difficult to accept the contention of the Learned Advocate that they have rendered the services to their clients without remuneration. In any event, both sides failed to place facts of the case in roper manner for the purpose determination of the classification of the service and to extend the benefit of exemption notification. There is no clarity on the facts of the cases in the impugned orders. 10. We find that in the first appeal, the appellants requested the Adjudicating A .....

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