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M/s. Chaddha Paper Mills Ltd. Versus Commissioner of Central Excise, Meerut-II

2015 (8) TMI 799 - CESTAT NEW DELHI

Business Auxiliary Service - Penalty u/s 76 - Exemption under Notification No.13/2003-ST, dated 20.06.2003 - Held that:- Activities undertaken was neither a promotion or marketing or sale of goods belonging to the client, i.e., M/s. Singh Traders nor it was promotion or marketing of the service provided by the client. Indeed, the activity was not captured under any of the limbs of the definition of BAS given under Section 65 (19) ibid during the relevant period - Thus, if the agreement is not co .....

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f service rendered in which case as reasoned in the preceding para (para - 5) the demand pertaining to the service rendered to M/s. Punjab Chemical Agency would not be sustainable. - appellant was essentially working as a commission agent and as per Notification No.13/2003-ST, dated 20.06.2003, BAS provided by a commission agent was exempted from the levy of service tax - the service rendered to M/s. Punjab Chemical Agency was clearly exempted under the said Notification - Decided in favour of a .....

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t and penalty under Section 76 of the Finance Act, 1994 was also imposed. 2. The facts of the case are that the appellant had entered into a contract with M/s. Singh Traders, Rampur, UP. As per the contract, the appellant was to ensure that the movements of lorries/tankers of M/s. Ahuja Goods Carriers (P) Ltd. is smooth and speedy and it should also arrange/collect information of molasses in respect of quantity of molases lifted from various sugar mills and their stock status on regular basis an .....

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odra and product (methanol) of M/s. Gujarat Narmada Valley Fertilizer Co. Ltd., Bharuch. As per the agreement, on the orders booked by the appellant, "the agent shall supply material to the party and raise invoices directly on the party"- For procurement of such orders, the appellant received commission at the rate of ₹ 400/- PMT on caustic soda lye and ₹ 1,000/- PMT on methanol. The primary adjudicating authority held that the services rendered by the appellant fell under .....

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nsure smooth and speedy movement of lorries/tankers and to collect information regarding the molasses in respect of quantity lifted from various sugar mills and their stock status on regular basis. This activity did not fall under any of the limbs of BAS as defined under Section 65 (19) ibid during the relevant period and therefore no service tax was leviable thereon. 4. Ld. Departmental Representative, on the other hand, reiterated the reasonings of the adjudication order She added that the con .....

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dered under that contract was essentially as quoted from the contract and reproduced below (the word "you" refer to the appellant):- "2. That you will ensure timely loading of quality of molasses from sugar mills from where purchases are finalized from time to time M/s. Jubilant Organosys Ltd., Gajraula. 3. That you will ensure that lorry tanker movement from sugar mill is smooth and speedy as well as they are not detained unnecessarily at the sugar mills. 4. That you will strictl .....

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your part. 6. That you will arrange/collect information of molasses lifted from various sugar mill and their stock status on regular basis and communicate to the company/us. 7. That you will also collect information and details of purchase contract made by various sugar mill time to time. 8. That you will be paid @ ₹ 9/- (Rupees nine only) per quintal of molasses quantity lifted towards supervision and organizing information. You shall submit your bill on monthly basis for the total quanti .....

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y the client. Indeed, the activity was not captured under any of the limbs of the definition of BAS given under Section 65 (19) ibid during the relevant period. The appellate authority has clearly observed that the contract dated 02.04.2003 (from which the extract has been reproduced above) was only produced before the adjudicating authority and not at the time of investigation and therefore it appears to be fabricated and cannot be relied upon at this stage. If that be so and the said contract .....

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nder BAS. So any which way, the impugned demand component pertaining to the activity done by the appellant for M/s. Singh Traders is not sustainable. 6. As regards the service rendered to M/s. Punjab Chemical Agency, we have perused the contract. Essentially the nature of service which the appellant provided is reproduced below from the contract:- "2. That you shall be authorised to book order on our behalf for the product, Caustic Soday Lye of Gujarat Alkalies & Chemicals Ltd., Vadodar .....

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