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2015 (8) TMI 799 - CESTAT NEW DELHI

2015 (8) TMI 799 - CESTAT NEW DELHI - 2015 (40) S.T.R. 812 (Tri. - Del.) - 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 .....

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or the Commissioner (Appeals) to even ascertain as to what was the nature of 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 Agenc .....

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,55,731/- under Business Auxiliary Service was confirmed along with interest 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 .....

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roduct (caustic soda Lye) of M/s. Gujarat Alkalies & Chemicals Ltd. Vadodra 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 adjudica .....

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its job was only supervision of loading and despatches of molasses and to ensure 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, .....

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t, which the appellant entered with M/s. Singh Traders that the service rendered 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 .....

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lorry tankers by the transporter will not be treated as a lapse/default on 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 in .....

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. 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. 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 an .....

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considered the nature of service rendered by the appellant does not fall under 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 p .....

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