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M/s. Khicha Industries Versus Commissioner of Central Excise -Jaipur-II

2015 (9) TMI 159 - CESTAT NEW DELHI

Demand of service tax - Cargo handling service - activity of grinding of rock phosphate - Penalty u/s 76, 77 & 78 - Held that:- Payment rates were composite rates not amenable to identification as to what rate/amount was paid to those components of services which were arguably in the nature of cargo handling service. When quantification is not possible, the levy fails. However, without elaborating on this judicial principle, we find that in the case of Commissioner of Central Excise Bhubaneswar .....

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e fact that "production of goods on behalf of the client" was added to the definition of BAS from the said date

Overall nature of contract did not make it amenable for coverage under cargo handling service - when the issue involves interpretation of law, extended period cannot be invoked. Also, the conditions for imposing penalty under Section78 are identical to those required for invoking extended period. Therefore, when 78 penalty has been found to be unimposable, invocation of exte .....

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₹ 16,82,673/- was confirmed along with interest but no penalty under Sections 76,77 and 78 of the Finance Act 1994 was imposed. The period of demand in this case is from 16/08/2002 to 9/9/2004. The show cause notice was issued on 02/08/2007. The primary adjudicating authority observed that the case involved interpretation of law, and consequently it gave the benefit of Section 80 ibid and did not impose any penalty under Sections 76, 77 and 78 ibid. The appellant was engaged in grinding o .....

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e securely stored in you works. (d) Loading of packed bags into trucks/other vehicles authorized by the company. OR (e) Transporting packed bags to Ranapratapnagar Railway station and loading the same into wagons Any damarrage/wharfago if levied by railways would be to your account. As per the said contract the payment rates were as under: (i) For all works at para 1 (a), (b), (c), & (d) ₹ 255.30/- (ii) For all works a para 1(a), (b), (c) and (e)- ₹ 288.00/- No other remuneration .....

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of business auxiliary service defined under Section (65) (19) ibid, (iii) the entire demand is time-barred. 3. The Ld. Departmental Representatives on the other hand contended that the scope of work did involve cargo handling, and therefore, the service tax is leviable under cargo handling service. 4. We have considered the contentions of both sides. 5. We find that the contract is essentially for grinding of rock phosphate to 100 mesh size powder. Even the "subject" of the contract i .....

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services which were arguably in the nature of cargo handling service. When quantification is not possible, the levy fails. However, without elaborating on this judicial principle, we find that in the case of Commissioner of Central Excise Bhubaneswar versus B.K. Thakkar 2008 (9) STR 542 (Tri-Kol) CESTAT while deciding a similar issue held that excavation, transportation and feeding of iron ores to crusher plant for processing were incidental activities for processing, and therefore, the entire c .....

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