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TMI Blog2018 (3) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... where minimum price is fixed, the sale is automatically confirmed in favour of the merchant who has quoted the highest price provided the highest price is more than the minimum price fixed. Appellants collected charges towards godown renting, lab testing charges etc., and also collected 0.50% of the sale value as service charges from the merchants. Department took a view that the appellants were not discharging service tax liability on storage and warehousing services. In respect of service charges related to the sales, department took a view that the said amounts would attract service tax liability under auction of property service under Section 65 (7a) of the Finance Act, 1994. Accordingly, two SCNs were issued demanding service tax of Rs. 9,68,759/- for the period 01.05.2006 to 31.03.2007 and Rs. 14,84,929/- for the period 01.04.2007 to 31.07.2008. SCNs also proposed imposition of penalties under various provisions. On adjudication, the proposals made in the SCNs were confirmed by the adjudicating authorities. In appeal, by a common Order No. 100 & 101/2009 ST (SLM) dated 29.06.2009, the Commissioner (Appeals) upheld the orders of the original authorities. Hence, appellants are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced as under:- "auction of property includes calling the auction or providing a facility, advertising or illustrating services, pre-auction price estimates, short term storage services, repair or restoration services in relation to auction of property". Taxable service in relation to this service under Section 65 (105) (zzzr) read as under:- "any service provided or to be provided to any person, by any other person, in relation to auction of property, movable or immovable, tangible or intangible, in any manner, but does not include auction or property under the directions or orders of a court of law or auction by the Government" 5.2 The issue that poses for consideration is whether the activities of the appellant would fall within the definition of Auction of property service for the period from 01.05.2006 to 31.03.2007. The activity which is the subject matter of dispute is governed by the following terms and conditions between the appellant and the members of the society: "Without prejudice to any of the foregoing provisions or any other clause in these tender terms and conditions, sago serve will also conduct an alternate daily secret tender for sale of sago and starch i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime and where the system is transparent enough for each bidder to be aware of the bids put forth by others. Per contra, the tendering process does not allow all prospective bidders to know of the bids made by others. In sale by auction, a bidder can make any number of bids by upping the ante vis-`-vis a rival bid. Auction signifies generally an increasing, an enhancement, and hence is applied to a public sale of property usually conducted by biddings, which enhances the price. (Smith s Dict. Of Antiq). The auction process will normally get culminated only when there are no more bids made for the goods auctioned. Whereas, in respect of tenders, there is only one bid that each bidder can make, the tendering process will be completed at the end of the appointed time and date and, only bids received till that cut off point will be considered for evaluation. However, in the traditional method of auctioneering, apart from the auction process per se the auctioneer also provides a gamut of other related services like providing a facility, advertising or illustrating the goods in auction, engage in pre-auction estimates, short term storage services, et al. In our view, this is precisely why ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the auction sale from other sales which is pointed out therein is that the auction sale is on the spot and is by public competition. Everybody present at the time of the said sale is entitled to raise his own bid on the spot and that is how the highest bidder is determined. It is pointed out that in a case of sale by tenders or by calling for offers, there is no opportunity to the intending buyer to raise his own bid. It is, therefore, urged that sale by inviting offers cannot be a sale by public auction. It is also pointed out relying upon the provisions of section 6 of the partition Act that in an open spot sale everybody would know the reserved bid or the upset price fixed therein and the bid would be above that. 18. I may usefully refer in this regard to the Halsbury s Laws of England Volume 2 Fourth Edition for what an auction means. Para 701 on page 360 is relevant. According to Halsbury s Laws of England, the auction is a manner of selling or letting property by bids, usually to the highest bidder by public competition. The prices which the public are asked to pay are the highest which those who bid can be tempted to offer by the skill and tact of the auctioneer under th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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