CHADDHA PAPER MILLS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, MEERUT-II
LAWS(CE)-2015-6-26
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on June 19,2015

Chaddha Paper Mills Ltd. Appellant
VERSUS
Commissioner Of Central Excise, Meerut -Ii Respondents

JUDGEMENT

R.K.SINGH, J. - (1.)APPEAL has been filed against Order -in -Appeal dated 29.05.2009, which upheld the Order -in -Original dated 19.11.2008 in terms of which service tax demand of Rs. 36,55,731/ - under Business Auxiliary Service was confirmed along with interest and penalty under Section 76 of the Finance Act, 1994 was also imposed.
(2.)The facts of the case are that the appellant had entered into a contract with M/s. Singh Traders, Rampur, UP. As per the contract, the appellant was to ensure that the movements of lorries/tankers of M/s. Ahuja Goods Carriers (P) Ltd. is smooth and speedy and it should also arrange/collect information of molasses in respect of quantity of molasses lifted from various sugar mills and their stock status on regular basis and it provide this information to M/s. Jubilant Organosys Ltd. For the aforesaid services, the appellant received Rs. 9/ - per quintal of molasses lifted as supervision and organizing information charges. The appellant also entered into an agreement with M/s. Punjab Chemical Agency, New Delhi (supplier and dealer of chemicals) in terms of which the appellant was authorized to book orders on behalf of the agent for the product (caustic soda Lye) of M/s. Gujarat Alkalies & Chemicals Ltd. Vadodra and product (methanol) of M/s. Gujarat Narmada Valley Fertilizer Co. Ltd., Bharuch. As per the agreement, on the orders booked by the appellant, "the agent shall supply material to the party and raise invoices directly on the party" - For procurement of such orders, the appellant received commission at the rate of Rs. 400/ - PMT on caustic soda lye and Rs. 1,000/ - PMT on methanol. The primary adjudicating authority held that the services rendered by the appellant fell under Business Auxiliary Service [Section 65(19) of the Finance Act, 1994] and therefore confirmed the impugned demand along with interest and penalty.
(3.)APPELLANT has contended that as far as the alleged service rendered to M/s. Punjab Chemical Agency, it was only acting as a commission agent and such commission was exempted under Notification No. , dated 20.06.2003. As regards the contract with M/s. Singh Traders, its job was only supervision of loading and dispatches of molasses and to ensure smooth and speedy movement of lorries/tankers and to collect information regarding the molasses in respect of quantity lifted from various sugar mills and their stock status on regular basis. This activity did not fall under any of the limbs of BAS as defined under Section 65(19) ibid during the relevant period and therefore no service tax was leviable thereon.
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