TMI Blog2015 (10) TMI 1581X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of deciding on the said plea of the assessees Extended period of limitation - Held that:- the Revenue, though in the context of dispute involving the Mysore Paper Mills, was aware of the fact of placing work orders upon various contractors, for extraction collection, debarking stacking of the pulp wood. From this it becomes clear that there was no malafide on the part of the contractors to suppress the fact of placement of work orders upon them - No malafides found on part of assessee. Issue of imposition of penalties in respect of demands which are within the limitation period left to Assistant Commissioner to decisde – Order set aside and matter remanded back – Appeal disposed in favour of Assessee. - ST/20437/2014-DB,ST/27030/2013-DB - - - Dated:- 30-7-2015 - Archana Wadhwa, Member (J) And Ashok Kumar Arya, Member (T) ST/20437/2014-DB,ST/27030/2013-DB, ST/27031/2013-DB, ST/27032/2013-DB,ST/27033/2013-DB,ST/27034/2013-DB, ST/27035/2013-DB,ST/27037/2013-DB,ST/27036/2013-DB, ST/1576/2012-DB,ST/27038/2013-DB,ST/27039/2013-DB, ST/27040/2013-DB,ST/27041/2013-DB,ST/27942/2013-DB, ST/1581/2012-DB, ST/1590/2012-DB,ST/1593/2012-DB, ST/1594/2012-DB, ST/1595/2012-DB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice. They contested that they are more or less in the nature of hired labour who cut the trees which belong to M/s Mysore Paper Mills Ltd., debark the same and further cut the same in to smaller pieces for the purpose of transportation and transport the said pulp wood to the factory premises of M/s Mysore Paper Mills Ltd. They also contested the demand on the point of limitation. It was further submitted by the appellants that the contract awarded to them involved two separate activities- one for felling, debarking and cutting of the trees and the other for transportation of the goods. As regards transportation of the goods from the forest area to the factory of M/s Mysore Paper Mills Ltd., M/s Mysore Paper Mills Ltd has already discharged their service tax liability as a recipient of the GTA services. Accordingly, they submitted that department cannot again ask for confirmation of service tax by taking into consideration the cost of the said GTA service in the total cost of the contract. Appellant also pleaded that it is a bonafide case of interpretation of the provisions of law and if at all service tax is held liable to be paid by them, no penalty can be imposed upon them in ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (para 39), learned A.R. submits that it is not a simple case of felling and cutting of the trees but involved further conversion to pulp wood billets, which shall be done only by cross-cut saws to prevent wastage. Para 40 of the tender notification gives the length of pulp wood billets and if there is any deficiency in debarking, then debarking for such pulp wood delivered by the contractor, will be got done at Mill Yard at the risk and cost of the contractor. These facts clearly show that the appellants were not merely felling, cutting, and transporting the trees but was also converting the same into pulp wood billets of the specified sizes. As such he submits that the appellants have processed the wood and as such activity would admittedly fall under the definition of business auxiliary service. As regards limitation, learned A. R. submits that the appellant never informed the department about the said activity and as such there is no occasion for the Revenue to take action against them. He also submits that the tender notification clearly lays down in para 84 that the service tax if any shall be borne by the company subject to the contractor complying with relevant provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commission agent means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person - (i) deals with goods or services or documents of title to such goods or services; or (ii) collects payment of sale price of such goods or services; or (iii) guarantees for collection or payment for such goods or services; or (iv) undertakes any activities relating to such sale or purchase of such goods or services; (b) information technology service means any service in relation to designing, developing or maintaining of computer software, or computerized data processing or system networking, or any other service primarily in relation to operation of computer systems; In terms of Section 65 (19) (v), production or processing of goods for, or on behalf of the client is a service falling under the category of business auxiliary service. As such, we are required to examine as to whether the activities undertaken by the appellants FOR their client M/s Mysore Paper Mills Ltd would amount to processing of goods or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case amounts to processing. However, such an activity may amount to manufacture also as contested by the learned advocate. Inasmuch as the issue of manufacture was never raised before the authorities below, we deem it fit to set aside the impugned orders and remand the matters to the original adjudicating authority for the purpose of deciding on the said plea of the assessees. If the adjudicating authority comes to a conclusion that the activity does not amount to manufacture, the appellants would be liable to pay service tax under the category of business auxiliary service by holding that they have done processing of the goods for their clients. 11. Learned advocate has also challenged the impugned orders on the point of limitation. He agrees that in some cases, the demands are falling within the limitation period inasmuch as there were repeated show-cause notices to each and every contractor. The first show-cause notice was beyond the limitation period and thereafter periodical show-cause notices stand issued within the normal period. 12. As regards limitation, learned advocate apart from contending that the extended period of limitation can be invoked by the Revenue only i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that all of them colluded together to suppress the said fact of grant of work orders to them. Issuance of tender notifications and placement of work orders is a matter of record of M/s Mysore Paper Mills, in which case, it is difficult to accept that the same were suppressed by the present appellants. We further examine learned A.R.'s contention that in terms of the tender notifications it is clearly written that the service tax, if any, would be paid bythe company subject to the contractors fulfilling the legal formalities. In fact we find that the said clause goes in favour of the assessee. The contract was not for a lumpsumvalue inclusive of all the taxes and any taxes required to be paid by the contractors, including the service tax was to be reimbursed by the company. In such a scenario, we cannot find any malafide motive on the part of the contractors not to pay the service tax. In view of the foregoing discussion, we agree with the learned advocate that there was no justifiable occasion for the Revenue to invoke longer period of limitation. As the matters are being remanded to the original adjudicating authority for considering the aspect of manufacture, we direct hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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