2012 (4) TMI 327 - HC - Service Tax

Non-compliance of pre-deposit order - SCN was issued assessee contented that the amounts received were for procuring orders on behalf of their principals which did not constitute taxable service - appeal before the CESTAT direction to the assessee to make pre-deposit of ₹ 30,00,000/- for entertaining the appeal - Held that - contracts entered into by the assessee with various parties do not appear to be simply placing orders and earning commission - the credit notes clearly disclose that the Assessee has directly dealt with the goods in lifting providing of the vehicles and delivery of the goods - the decision of the Tribunal in directing the assessee to make predeposit of ₹ 30,00,000/- out of the demand of ₹ 91,07,006/- and dismissing the appeal for non compliance of the predeposit order cannot be faulted against assessee.

Summary

Issues:
1) Justification of CESTAT in dismissing the appeal for non-compliance of pre-deposit order.

Analysis:
The case involved the question of whether the CESTAT was justified in dismissing the appeal filed by the appellant - assessee for non-compliance of a pre-deposit order. The appellant had received a significant amount as commission from various parties, claiming that it was not taxable under service tax as it was for procuring orders on behalf of principals. However, the Assistant Commissioner issued a Show Cause Notice for recovery of service tax. The duty demand was confirmed initially, but the CESTAT later set aside the decision and remanded the matter. The Commissioner for Central Excise then confirmed the demand and imposed a penalty. The appellant appealed to the CESTAT, which directed a pre-deposit for entertaining the appeal. The appellant's Modification Application was rejected, leading to the dismissal of the appeal for non-compliance with the pre-deposit order.

The appellant argued that the services rendered were not Clearing and Forwarding Agent's services but rather assisting principals in various tasks. They contended that the Tribunal failed to consider all agreements and that some amounts were for the sale of advance licenses, not C&F services. The appellant challenged the Tribunal's order on pre-deposit compliance. The respondent supported the order based on recorded reasons. The Court, after considering the submissions, found no reason to entertain the appeal. The Adjudicating Authority distinguished the larger Bench decision cited by the Tribunal, stating that the appellant had not only procured orders but also handled goods as per contracts with parties.

The Adjudicating Authority analyzed the contracts and concluded that the transactions involved more than just placing orders and earning commission. They found evidence that the appellant directly dealt with goods by lifting, providing vehicles, and delivering them. Therefore, the Tribunal's view that the appellant rendered C&F services was upheld. The Tribunal's decision to direct a pre-deposit and dismiss the appeal for non-compliance was deemed appropriate. Consequently, the appeal was dismissed with no costs awarded.