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2008 (6) TMI 626

..... which share the common issue. The particulars of appellants, Order-in-Original No. & date, period involved, nature of activities carried out by each appellant, and amount confirmed are detailed as under :- Sr. No. Name of the appellant OIO No. & date Period Involved Service Tax involved (Rs.) Nature of activities carried out Remarks 1. Shri Bharat Haribhau Salunke STR/STC/76/2007 dt. 26-10-2007 2002-03 to 2005-06 24,986/- Transportation of sugar from sugar house to godown, within factory premises with his own vehicle Equal penalty each under Sections 76 and 78 and penalty under Section 77 along with interest. 2. Shri Deepak Shankar Gavhane STR/STC/93/2007 dated 29-10-2007 2002-03 to 2005-06 27,629/- Stitching of sugar bags in sugar house of M/s. BD SSK Ltd. -do- 3. Shri Mahadev Vithal Kamble STR/STC/178/2007 dated 30-10-2007 2002-03 to 2005-06 25,379/- Bailing of bags and loading and unloading of bagasse bales etc. -do- 4. Shri Ramchandra J. Shidruk STR/STC/75/2007 dated 26-10-2007 2004-05 to 2005-06 9,773/- Handling of pressmud with the help of labourers -do- 5. Shri Mahadev Shankar Chavan STR/STC/92/07 dated 26-10-2007 2005-06 4,094/- Bailing of bagasse and loading and un .....

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..... ested the Assistant Commissioner, Central Excise, Satara to decide the demand Notice on the basis of submissions without hearing him in person on 29-11-2007 or 30-11-2007; that however, without taking any cognizance of the said reply, the Assistant Commissioner in his order recorded that the appellant has not filed any reply nor attended the hearing on various dates with intention to delay the adjudication proceedings which findings are not factually correct and thus, the order passed by him was in contravention of principle of natural justice. (iv) that the first appellant states that pure transportation of sugar bags from sugar house to godown using his own vehicle within the factory premises of M/s. Balasaheb Desai SSK cannot be treated as cargo handling agency service since in the definition of cargo handling service itself pure transportation of goods is specifically excluded; (v) that the appellant at Sl. No. 2 states that stitching of sugar bags is part and parcel of activity which is one of the incidental and ancillary process for completion of manufacture of sugar and hence his activity is correctly treatable as Business Auxiliary Service with effect from 16-6-2005; (vi) t .....

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..... with mala fide intention; that they relied on the following judgements :- (a) Tamilnadu Housing Board v. CCE - 1994 (74) E.L.T. 9 (S.C.), (b) Padmini Products v. CCE - 1989 (43) E.L.T. 195 (S.C.) (c) Cosmic Dye Chemicals v. CCE - 1995 (75) E.L.T. 721 (S.C.); (xii) that without prejudice to the above, the Department while raising the demands, the principle cum-tax price is not at all followed; that they relied on the following decisions :- (a) Gem Star Enterprises P. Ltd. v. CCE - 2000 (7) S.T.R. 342 (Tri. Bang.) (b) Foster Wheeler Energy Ltd. v. CCE [2007 (7) S.T.R. 443 (T) = 2007 (81) RLT 893 (CESTAT - Ahmd.)]; (xiii) that the Board vide its Circular No. B-11/1/2002 TRU dated 1-8-2002 vide para (15) has clarified that the activities of cargo handling agency services provided by an individual by hiring labourers is not taxable under Cargo handling Agency service; 4. PH was granted on 16-6-2008 at 11.00 A.M. S/Shri V.B. Gaikawad and Mukund Nyalkalkar, Advocates, duly authorized by all six appellants, appeared for PH. At the outset, they requested to take all six appeals for common proceedings, as the issue involved in all six appeals is one and the same. In addition to reitera .....

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..... ers , it has become very clear that the adjudicating authority has not gone through the case records and passed orders mechanically. Therefore, all the six orders are to be termed as non-speaking orders . Inspite of the above shortcomings, neither the appellants nor the Advocates who appeared on behalf of the appellants, have requested for remand. Therefore, all the six appeals are taken for decision on the basis of records and submissions made during the PH. 6. The first appellant (Shri Bharat Haribhau Salunke) is engaged in transportation of sugar from sugarhouse to godown within the factory premises by his own vehicle. The Assistant Commissioner has not given any findings as to how the above service falls under cargo handling service . Whereas the appellant contends that since he is engaged in transporting of sugar within the factory premises, and not involved in loading, unloading of goods, the service carried out by him cannot be classified under cargo handling service in view of the exclusive provision contained under cargo handling service . Besides, the appellant contends that without prejudice to the above, the amount received during the financial year 2005-06 was onl .....

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..... the same mechanically. 8. The 3rd, 5th and 6th appellants (Shri Mahadev Vithal Kamble, Shri Mahadev Shankar Chavan, Shri Ajit Sopan Salunkhe) activities relate to handling of bagasse. In their cases also, the Assistant Commissioner has not given any findings as to how those activities would fall under cargo handling service . Whereas the 3rd and 5th appellant claim that their activities of bailing of bags, loading and unloading of bagasse bales with the help of labourers should be treated as supply of labourers and hence taxable with effect from 16-6-2005 under manpower recruitment agency service. The 6th appellant claims that the activities of unloading of bagassse is the activity in or in relation to the manufacture of sugar and molasses and since the same is for generation of steam and thus, it is the activity during the course of manufacture and utmost it can be treated as Business Auxiliary Service with effect from 10-9-2004 and is fully exempted vide Notification No. 08/2005 ST dated 1-3-2005. All the three appellants further claim that as per the Board s Circular No. B-11/1/2002 TRU dated 1-8-2002, it has been clarified at para (15) that the activities i.e. cargo handli .....

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..... ment or supply of manpower, temporarily or otherwise, to a client . 8.2 From the above, it could be seen that the definition underwent a change with effect from 16-6-2005 by inserting the words supply of manpower temporarily or otherwise, to tax service provider who is supplier of manpower temporarily or otherwise and should also be a commercial concern . But in the present case, the persons engaged were individuals who supplied manpower to the sugar factories. Only with effect from 1-5-2006, the term commercial concern was substituted by the term any person . Thus, only with effect from 1-5-2006, the activities of the above three appellants would fall under manpower recruitment & supply agency service and not before that. As all the demands are prior to 1-5-2006 (i.e. 2005-06), there cannot be any demand from the above three appellants under manpower recruitment & supply agency service also. Besides, there cannot be any demand under Business Auxiliary Services also as claimed by the sixth appellant since the same is exempt in terms of Notification No. 08/2005 ST dated 1-3-2005. 8.3 The 6th appellant was also charged for cleaning services during the year 2006-07. .....

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..... ) Tamilnadu Housing Board v. CCE - 1994 (74) E.L.T. 9 (S.C.), (b) Padmini Products v. CCE - 1989 (43) E.L.T. 195 (S.C.) (c) Cosmic Dye Chemicals v. CCE - 1995 (75) E.L.T. 721 (S.C.); 10.1 It has been held that the activities of the appellants do not fall under cargo handling service . Besides, neither the SCNs nor OIOs throws any discussion as to how and why the activities could be brought under the ambit of service tax net i.e. under cargo handling service . In other words, the Department itself is not sure of the activities of the appellant. Thus, as there are many interpretations possible, there cannot be allegation of mala fide intention on the part of the appellants. Thus all the above case laws lend support to the appellants. Consequently, there cannot be any liability for penalty. Therefore, invoking extended period also fails. 11. All the appellants also claim that the Department, while raising the demands, the principle cum-tax price is not followed. To support their contention, they relied on the decisions in the case of Gem Star Enterprises Pvt. Ltd. v. CCE - 2007 (7) S.T.R. 342 (Tri. Bang.) and Foster Wheeler Energy Ltd. v. CCE [2007 (7) 443 (Tribunal) = 2007 .....

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