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TMI Blog2010 (6) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... lacs forty three thousands and seven hundred twenty four) was levied under Section 78 of Finance Act, 1994 upon the appellant for suppressing value of taxable services while refraining from imposing penalty under Section 76. (d) Penalty of Rs. 1,000/- was imposed under Section 77 of Finance Act, 1994. 2. While filing the appeal, the appellant has also moved stay application for stay of realization of the demand aforesaid. 3. Learned Adjudicating Authority examining the allegation in show cause notice and defence led by appellant, framed following issues for adjudication :- (i) Whether M/s. JLIL has provided services taxable under the category of business auxiliary service; (ii) Whether extended period of limitation is invokable in terms of proviso to Section 73 of Finance Act, 1994 and M/s. JLIL are liable to penalty under Sections 76, 77 and 78 of Finance Act, 1994 as well as interest under Section 75 of the Finance Act, 1994 in addition to paying the service tax amount. (iii) Whether gross amount charged is to be considered as inclusive of service tax. 4. It was noticed by learned Adjudicating Authority that in terms of share purchase agreement dated 18-1-2006 followed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... townships under the brand name "SAHARA" and extensive publicity was made by M/s. SAL to promote such housing project of M/s. SICCL in terms of above agreement. So also, he confirmed payments made to M/s. SAL as per agreement dated 30-3-1995 by M/s. SICCL as apparent from Para 2.5 of OIO. The Director Shri O.P. Srivastava of M/s. SAL without disputing the evidence recorded from Shri R.S. Dubey on 11-2-2008, 22-4-2008 and 21-5-2008 in his statement recorded on 27-5-2008 also clarified aforesaid factual position and corroborated that service charges were paid to M/s. SAL per passenger tickets in terms of agreement dated 30-3-1995. Statement of Smt. Vandana Bhargava, Director of M/s. SICCL recorded on 17-6-2008 also revealed aforesaid factual position. She also confirmed that M/s. SAL was under an obligation to make extensive publicity of the housing project of M/s. SICCL. Shri J.K. Tewari, Manager (Audit & Taxation of the appellant) vide letter dated 13th October, 2008 provided details of payment made by M/s. SICCL to M/s. SAL for the period from July, 2003 up to January, 2007 in terms of agreement dated 30-3-1995. The money received by M/s. SAL for the aforesaid activity was ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service is concerned, the authority dealt that issue at page 41 of the OIO and he found that the appellant's claim was merited. But he decided the penalty issue against the appellant in terms of Para 34 to 34.2 of OIO. Interest liability also arose and required to be paid in terms of Para 35 of OIO. 12. Learned Counsel appearing on behalf of the appellant submitted that M/s. SAL was merely using Logo of M/s. SICCL and promoting housing project of the later. The object of use of Logo was as per agreement dated 30-3-1995. Condition No. 3 & 4 of agreement dated 30-3-1995 was not fulfilled. Although brochures were required to be distributed with different tickets issued by M/s. SAL as per condition No. 3 no such distribution was done. In terms of condition No. 4, M/s. SAL was to make other arrangements required from the side of M/s. SICCL. to popularize the business as that shall be intimated by that company to the appellant company after mutual consent. But such condition was not fulfilled. The appellant having no current assets as on 31st March, 2009 and having loss before taxation for the financial year 2008-09, it has no means to pay the demand. 13. Learned Counsel also ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . SICCL to M/s. SAL in terms of Sr. No. 5 of the letter dated 30-3-1995 during the relevant period was only towards display of logo of M/s. SAL. 16. Law is well settled in case of Delhi Cloth and General Mills Co. Ltd., etc. v. The Commissioner of Sales Tax, Indore, reported in AIR 1971 SC 2216 : (1971) 2 SCC 559; (1971) 28 STC 331 (S.C.) that the levy and collection of tax is regulated by law and not by contract (Para 10 of the judgment). The term "service" generally means service of any description which is made available to potential user and includes the provision of facilities. Such term has variety of meanings. It may mean any benefit or any act resulting in promoting or serving interest of the recipient. It may be contractual, professional, public, domestic, legal, and statutory etc. How it should be understood and what it means depends in the context in which it has been used in an enactment. An activity in the nature of service whether provided individually or integrally, and solely, separately or combinedly with other activities makes no difference to the chargeability when incidence of levy occurs. Permutation and combination of activities of services do not change char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all your tickets. Boarding Passes, Baggage tags, publicity materials and advertisements in newspapers hoardings, etc. (3) Our brouchers (to be supplied by us) will have to be distributed with each ticket issued by you. (4) You have agreed to make other arrangements required from our side to popularise our business as may be intimated by us to your after mutual consent. (5) Since the publicity is mainly, directly inked with the tickets issued by you and/or passenger to be carried by in your aircrafts, we shall pay you Rs. 1075/- per passenger on long sector and Rs. 400/- per passenger on short sector carried by you. (6) It is also further agreed that to popularise our scheme and business activities and for that purposes to increase exposure to the general public, you will allow on trunk routes a minimum discount of Rs. 500/- to passenger on every trip till such time arrangements as above remain in force. (7) That the above arrangements shall remain in force for a period of one year with effect from 1st April, 1995, or renewed further. (8) You will allow at all reasonable time our representatives to verify that you are complying with the above arrangements, on board of the Airc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as given to the passenger aiding in promoting marketing of the project. Information was not given to passengers fancifully but purposefully to serve object of each other as envisaged by the communication dated 30-3-1995. 20. It may be appreciated that a man of ordinary prudence and diligence shall not adopt any practice or method which shall deprive him from the benefit or gain he intends. Mere use of logo to serve no useful purpose is inconceivable and no monetary consideration was payable to the appellant without any purpose or motive behind such use. So also without any reciprocated advantage no one shall make payment voluntarily. No consideration no contract being an essential element of law of contract consideration received by the appellant was testimony of providing commercially useful service by the Appellant. In absence of any evidence to suggest that the service provided by the appellant was not useful and the service received was not intended from the provider, the appellant can be said to have catered to the need of promotion of real estate venture of M/s. SICCL. Prima facie, material facts and attendant circumstance as well as echoing evidence do not appear to have im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Valves case - 2008 (12) S.T.R. 104 (S.C.) = 2006 (204) E.L.T. 513 (S.C.) and M/s. Indu Nissan Oxo Chemical Industries Ltd. v. UOI - 2008 (221) E.L.T. 7 (S.C.). The applicable principles have also been set out succinctly in Silliguri Municipality and Ors. v. Amalendu Das and Ors. (AIR 1984 SC 653), M/s. Samarias Trading Co. Pvt. Ltd. v. Samuel and Ors. (AIR 1985 SC 61) and Assistant Collector of Central Excise v. Dunlop India Ltd., (1985) (19) E.L.T. 22 (S.C.) AIR 1985 SC 300). While arriving at the above conclusion, we were conscious of decision of Apex Court in Ravi Gupta's case - 2009 (237) E.L.T. 3 (S.C.). The Hon'ble Supreme Court in para 10 of the judgement held as under :- It is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand raised has no leg to stand, it would be undesirable to require the assessee to pay full or substantive part of the demand. Petitions for stay should not be disposed of in a routine matter unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand. There can be no rule of universal application ..... X X X X Extracts X X X X X X X X Extracts X X X X
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