Commissioner of Central Excise Vs. Bojraj Textile Mills Ltd.

Commissioner of Central Excise vs Bojraj Textile Mills Ltd.

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu Decided May 23, 2008

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Citation: sooperkanoon.com/47238
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Judge: K T P.
Decided On: May 23, 2008
Subject: Service Tax

Case Summary

AI-generated summary - not the official court judgment text.

Service Tax

Key legal issue: Service Tax

Parties & Advocates

Appellant / Petitioner

Commissioner of Central Excise

Respondent

Bojraj Textile Mills Ltd.

Excerpt

.....the impugned order, the commissioner (appeals) had relied on the final order no. 770 & 771/2005 in the case of m/s. aruppukottai shri vijayalakshmi textile mills ltd, tuticorin and the judgments of the apex court in cce, meerut v. l.h. sugar factories ltd. and ors.2005 tiol 105 sc sc st dated 27.7.2005.2. the revenue has filed the instant appeal against the decision of the commissioner (appeals). it is argued that vide finance act, 2000, availers of clearing and forwarding agents' service during 16.7.97 to 16.10.98 were made liable to pay service tax for the said period.accordingly, the original authority had demanded the service tax and interest on the c & f agents' service availed by the respondents during 16.7.97 to 16.10.98 vide his order-in-original no. 6/05 on conclusion of proceedings initiated by issuing show cause notice dated 30.8.04. it is submitted that the department had filed a civil appeal in the supreme court against its judgment in the cce, chennai v. sundaram fastners ltd. under civil appeal no. 7144/2005. in the sundaram fastners case in respect of which civil appeal was admitted by the apex court, the court had followed the same reasoning as in cce meerut v. lh sugar factories ltd. and ors. (supra). therefore the apex court had felt it necessary to keep the issue open for further deliberation and final decision. 'lh sugar factories' judgment was 'riddled with inharmonious construction diametrically opposite to the legislative intention'. in view of the legislative intention to recover service tax on c & f agents' service availed by persons during 16.7.97 to 16.10.98, the courts were required to interpret the legal provision consistent with the intention of the legislature. it was prayed that the order of the original authority may be restored.3. i have carefully considered the facts of the case and the rival submissions. the show cause notice to recover the service tax was issued much beyond the period of six months from the.....

Full Judgment

1. Vide the impugned order, the Commissioner (Appeals) vacated the order of the original authority demanding service tax of Rs. 31,111/- from M/s. Bojaraj Textile Mills Limited towards tax on services of Clearing and Forwarding Agents received by it during 16.7.97 to 16.10.98, the interest under Section 75 of the Finance Act '94 (the act) and penalties imposed under Sections 76, 78 and 79 of the Act.

While passing the impugned order, the Commissioner (Appeals) had relied on the Final Order No. 770 & 771/2005 in the case of M/s. Aruppukottai Shri Vijayalakshmi Textile Mills Ltd, Tuticorin and the judgments of the apex Court in CCE, Meerut v. L.H. Sugar Factories Ltd. and Ors.

2005 TIOL 105 SC SC ST dated 27.7.2005.

2. The Revenue has filed the instant appeal against the decision of the Commissioner (Appeals). It is argued that vide Finance Act, 2000, availers of Clearing and Forwarding Agents' service during 16.7.97 to 16.10.98 were made liable to pay service tax for the said period.

Accordingly, the original authority had demanded the service tax and interest on the C & F Agents' Service availed by the respondents during 16.7.97 to 16.10.98 vide his Order-in-Original No. 6/05 on conclusion of proceedings initiated by issuing Show Cause Notice dated 30.8.04. It is submitted that the department had filed a Civil Appeal in the Supreme Court against its judgment in the CCE, Chennai v. Sundaram Fastners Ltd. under Civil Appeal No. 7144/2005. In the Sundaram Fastners case in respect of which civil appeal was admitted by the Apex Court, the Court had followed the same reasoning as in CCE Meerut v. LH Sugar Factories Ltd. and Ors. (supra). Therefore the Apex Court had felt it necessary to keep the issue open for further deliberation and final decision. 'LH Sugar Factories' judgment was 'riddled with inharmonious construction diametrically opposite to the legislative intention'. In view of the legislative intention to recover service tax on C & F Agents' Service availed by persons during 16.7.97 to 16.10.98, the Courts were required to interpret the legal provision consistent with the intention of the legislature. It was prayed that the order of the original authority may be restored.

3. I have carefully considered the facts of the case and the rival submissions. The Show Cause Notice to recover the service tax was issued much beyond the period of six months from the 12.5.2000 (date when the Finance Act received assent of President) allowed in the Finance Act, 2000. Therefore, the demand confirmed by the original authority was on a time barred Show Cause Notice. Moreover, the Show Cause Notice had invoked Section 73 which could not be validly invoked to demand tax due on C & F Agents' services for which returns had to be filed under Section 71A of the Act.CCE, Meerut v. L.H. Sugar Factories Ltd (supra) the Hon'ble Supreme Court had recorded with approval the following conclusion of this Tribunal.

The above would show that even the amended Section 73 takes in only the case of assessees who are liable to file return under Section 70. Admittedly, the liability to file return is cast on the appellants only under Section 71A. The class of persons who are under Section 71A is not brought under the net of Section 73. The above being the position show cause notices issued to the appellants invoking Section 73 are not maintainable.

I find that the impugned order has been passed following a stream of judicial authority which held that demand of service tax not paid on C&F Agents' service for the period 16.07.97 to 16.10.98 could not be validly made invoking Section 73 of the Finance Act 1994. Accordingly, I dismiss the appeal filed by the revenue as devoid of merit.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Tami... Same Parties Commissioner of Central Excise vs Bojraj Textile Mills Ltd. Same Subject Service Tax Same Judge K T P.