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2018 (8) TMI 178

Extended period of limitation - Composite service or not - contract of C&F cum packaging agent - demand of service tax on reimbursement of expenses - Held that:- Though there is a single agreement but it embodies separate contract for each kind of services that being provided and separate compensation for those services. In view of above, there is no vivisection attempted by the Revenue of composite service as there is no single composite service. The appellant has separately billed for each of .....

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d within limitation. - Appeal allowed in part. - Appeal No. ST/123/2009-DB - Final Order No. A / 11603 /2018 - Dated:- 1-8-2018 - HON BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) And HON BLE MR. RAJU, MEMBER (TECHNICAL) For the Appellant : Shri. Jigar Shah ( Advocate ) For the Respondent : Ms. Nitina Nagori ( A. R. ) ORDER Per : Raju This appeal has been filed by M/s Deep Chemicals against demand of Service Tax, interest on imposition of penalty. 2. Ld. Counsel for the appellant pointed out that t .....

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l argued that in view of the decision of Hon ble Apex Court in case of Nizam Sugar Factory Vs. CCE 2008 (9) STR 314 (SC) the demand Show Cause Notice on same/similar facts cannot be raised invoking extended period of limitation when another Show Cause Notice on same similar fact has already been issued. Ld. Counsel argued that in view of above the demand beyond the extended period of limitation cannot be sustain. 3. Ld. Counsel further argued that the appellant are entered into contract with M/s .....

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c&f service only could be included in value of taxable service under the category of C&f service. (iii) Regarding other fixed expenses they informed that these are charged for the expenses incurred by them towards fixed capital reimbursement, VFFS machines, spares, interest on fixed capital investment and operator and helper salary, and are no related to remuneration or commission paid to clearing and forwarding agent by the client. (iv) The loading charges for outward movement is for re .....

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rds the investment made by them on the purchase of VFFSA machine for packing of salt. The machine was purchased by them in May 2004. He stated that prior to the purchase of machine the salt was packed manually by them. He stated that they had taken a loan from HSBC Bank for ₹ 18 lakhs. The charges ₹ 10431/- towards fixed interest and ₹ 37255/- towards fixed capital reimbursement are claimed from M/s Tata. He stated that it was in the scheme of the contract that they had to purc .....

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salary of the operator ie, approximately ₹ 41,000/- The salary of the operator is being increased to ₹ 37,400/- in the new agreement. 5.2 Regarding the receipts of Machine Spares, he stated that these charges were fixed from May 2004 at the rate of ₹ 10,000/- per month. He stated that the actual expenditure on the spares of machine used for packing of common salt during rainy season is more and in some seasons it is less. The receipt of machine spares is increased to ₹ 1 .....

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Circular: 186/2015-S.T.dated 05-Oct-2015. Ld. Counsel relied on the decision of Hon ble Apex Court in the case of Gannon Dunkerley & Co.(P) 1958 (4) TMI 42 Supreme Court of India. 7. Ld. Counsel argued that it is not open the Revenue to divide a single service of C&F agent into different components and demand Service Tax. He argued that the dominant purpose of the contract needs to be appreciated and service should be classified under the said head. He relied on the decision of House of .....

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composite contract. In these circumstances the Tribunal held that different components of the single contract cannot be vivisected and part of the subjected to Tax. The said decision was of Tribunal affirmed by Hon ble Apex court as reported in (2004) 170 ELT A181. We find that the fact for the instance case are different. The contract is not composite contract. Each payment is measured separately depending on the quantum of service provided. The payments for the entire contract was not one comp .....

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, though there is a single instrument embodying them, and the power of the State to separate the agreement to sell, from the agreement to do work and render service and to impose a tax thereon cannot be questioned, and will stand untouched by the present judgment. In the instance case, though there is a single agreement but it embodies separate contract for each kind of services that being provided and separate compensation for those services. In view of above, there is no vivisection attempted .....

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ich comprises a single supply from an economic point of view should not be artificially split. The method of charging or invoicing does not in itself determine whether the service provided is a single service or multiple services. Single price normally suggests a single supply though not decisive. The real nature and substance of the transaction and not merely the form of the transaction should be the guiding factor for deciding the classification. 11. Ld. Counsel has argued that the method of c .....

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t a Show Cause Notice was issued to the appellant on 22.11.2006 on the basis of inquiry initiated by summons. On the basis of same inquiry initiated the appellant response in the said Show Cause Notice dated 22.11.2006 and impugned notice dated 05.04.2007 is one on the same. The argument under consideration in both notices was also in the same, under these circumstance invocation of the extend period of limitation cannot be sustain. Looking at the facts of the case the penalty under Section 78 i .....

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