2011 (4) TMI 519 - AT - Service Tax

Demand - Suppression of facts - Appellants has registered them under the category of Cargo handing agency services and Business Auxiliary services and paying Service Tax, the department has not objected such registration or S.T. returns submitted by the Appellants - Held that the memo of appeal filed by the Revenue that the findings of Commissioner (Appeals) on limitation does not stand challenged by them. There is no ground implicit or explicit in the memo of appeal dealing with the findings of Commissioner (Appeals) on limitation - Appeal is disposed of

Issues:

1. Interpretation of MOUs - Del Credere Agreement vs. C&F Agent Agreement.
2. Acceptance of Revenue's stand on three MOUs and limitation benefit extended.
3. Examination of MOU dated 1.4.2000 for activities undertaken by the respondent.
4. Lack of terms and conditions in the MOU for loading/unloading activities.
5. Extension of benefit on limitation period for the other three MOUs.
6. Challenge on the invocation of the extended period of demand by the Revenue.
7. Acceptance of duty liability by the respondent for the part falling within the limitation period.

Analysis:

1. The judgment concerns the interpretation of various Memorandums of Understanding (MOUs) entered into by the respondent. The Commissioner (Appeals) accepted the stand of the respondent regarding one MOU as a Del Credere Agreement but held the other three MOUs as falling under the category of C&F agents. The respondent accepted their tax liability for the period within the limitation, while the Revenue appealed against the decision.

2. The Commissioner (Appeals) upheld the Revenue's stand on three MOUs and extended the benefit of limitation to the respondent. The respondent did not appeal against this decision, accepting their tax liability for the relevant period. The Revenue's appeal on this issue was disposed of accordingly.

3. The MOU dated 1.4.2000 between the respondent and M/s Laxmi Cement was examined by the Commissioner. It was observed that the respondent was engaged in Del Credere activities, not requiring them to undertake tasks like loading/unloading or handling goods. The absence of such activities led to the conclusion that the respondent was not providing C&F agent services.

4. The absence of terms and conditions in the MOU regarding loading/unloading activities was a crucial point of contention. While the Revenue argued that some invoices reflected these activities, the respondent clarified that the invoices only pertained to the commission charged for Del Credere activities. The appellate authority found no requirement in the MOU for the respondent to engage in loading/unloading tasks, supporting the Commissioner's decision.

5. Regarding the other three MOUs, the Commissioner extended the benefit of limitation to the respondent. The period under consideration was specified, and the Commissioner noted that the respondent had registered under specific service categories and paid Service Tax without objection from the department. This led to the conclusion that there was no malafide intent on the respondent's part, justifying the extension of the limitation benefit.

6. The respondent acknowledged the duty liability for the part falling within the limitation period, indicating their acceptance of the Commissioner's decision. The Revenue did not challenge this aspect of the judgment, leading to the acceptance of the duty liability by the respondent for the relevant period.

7. The judgment highlighted that the Revenue did not challenge the Commissioner's decision on the limitation issue in their appeal. As a result, the part of the impugned order related to the limitation was upheld, and the Revenue's appeal was disposed of accordingly.

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