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TMI Blog2009 (7) TMI 1086X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 21-9-2007 directing them to show cause as to why the Service tax amount of Rs. 1,67,089/- in the case of first appellant and Rs. 2,66,961/- in the case of second appellant under Section 73 of the Finance Act, 1994 (hereinafter referred as the Act) should not be demanded, interest under Section 75 of the Act should not be confirmed; that it was also proposed to impose penalty under Sections 76, 77 and 78 of the Act; that on adjudication, the demands raised in the SCN-cum-Demand Notices were confirmed along with interest, besides imposing penalties separately under Sections 76, 77 and 78 for having failed to take registration, delay in payment of Service tax, non-filing of returns and suppressing the facts with intent to evade payment of Service tax; that it was further held that the activities carried out by the appellants are covered under the category of cargo handing services and not under man power recruitment supply agency service . 2. Being aggrieved by the above orders, the appellants have come up with the present appeals along with stay petitions, wherein they, inter alia, contended as under :- (i) that the bagasse which is generated during the course of manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CCE - 2007 (5) S.T.R. 308 = 2007 (209) E.L.T. 22 (Tribunal), and (d) CCE v. Ganpati Motors - 2008 (12) S.T.R. 729; (vi) that in the case of second appellant, the department has acquired knowledge of the activities in the month, 2006 itself, whereas the department has issued the SCN on 21-9-2007 and hence the SCN is time barred as held by the Tribunal in the following cases - (a) Lovely Food Industries v. CCE - 2006 (195) E.L.T. 90, (b) Jetex Cab v. CCE - 2007 (5) S.T.R. 446 (Tribunal) = 2007 (210) E.L.T. 73 (Tribunal) = 2007 (78) RLT 682 and (c) Shree Renuka Sugars Ltd. v. CCE - 2007 (210) E.L.T. 385; (vii) that as the issue involved in interpretation, there is no scope to hold the appellant with guilty intention to evade payment of tax and hence the extended period is not available to the department and the appellant relies on the following decisions - (a) K.K. Appachan v. CCE - 2007 (7) S.T.R. 230, (b) Homa Engineering Works v. CCE - 2007 (7) S.T.R. 546 = 2007 (81) RLT 313. 3. PH was held on 6-7-2009 at 04.30 PM. Shri V.B. Gaikawad, Advocate, duly authorized by the appellants appeared before me at 04.30 PM. None appeared from Department s side despite intimat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice or not. The Assistant Commissioner has not given any findings in the impugned OIOs with reference to actual activities viz-a-viz the definition available under the Act. In fact, the Assistant Commissioner has concluded that no definition for cargo handling service is available either in the Act or rules made thereunder and accordingly, he has referred the dictionary meaning for the term agency and accordingly, concluded that the activities of the appellants as contractors fall under the category of cargo handling service . The above conclusion is wrong in as much as that the term cargo handling agency service has been defined under Section 65(23) of the Finance Act, 1994, Such is a fatal error committed by the Assistant Commissioner in both the orders. On this ground alone, the impugned orders are not sustainable in the eyes of the law. 4.2 The meaning of cargo handling agency service which was brought under the Service Tax net vide Notification No. 8/2002-S.T., dated 1-8-2002 with effect from 16-8-2002 is reproduced as under :- Section 65(23) of the Finance Act, 1994 as introduced by Section 149 of the Finance Act, 2002 defines cargo handling service to mean ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wajit Hambirrao Patil and Baburao Nivrutti Patil are individuals, in as much as the appeals are filed by the appellants in individual capacity and therefore, the Board s Circular referred above fully support the appellants views. In view of the above discussions, I hold that the appellants activities would not fall under cargo handling service. 4.4 In addition to the above, it is the claim of the second appellant that the department for the period covering from 2005-06 to 2007-08 issued another SCN-cum-Demand Notice dated 8-10-2008 demanding Service tax and education cess treating the activities of the appellant as covered under manpower recruitment and supply agency service . According to the appellant that the above fact is sufficient to prove that the department itself is not sure about the classification either to bring his service under cargo handling service or manpower recruitment and supply agency service . In this regard, I have gone through the SCN dated 8-10-2008 wherein the appellant was directed to show cause as to why the amount of Rs. 1,17,133/- should not be demanded under manpower recruitment and supply agency service , as the appellant has provided man p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant claims that the department acquired knowledge of his activities in the month of May, 2006, whereas the SCN-cum-Demand Notice was issued only on 21-9-2007. While replying to the SCN itself, the above aspect has been brought to the notice of the lower authority. But no rebuttal has been given by the Assistant Commissioner in passing the impugned OIO. As held by the Apex Court in the latest decision in the case of Kushal Fertilisers (P) Ltd. v. Commissioner [2009 (238) E.L.T. 21 (S.C.)], it is responsibility of the department to issue SCN-cum-Demand Notice within a normal period of one year from the date on which the department has acquired the knowledge of the activities of the appellant. On this count also, the impugned OIO in respect of second appellant is not sustainable. In short the impugned OIOs are not only maintainable/sustainable on the ground of merits as well as on the time bar aspect. Hence both the appellants are not liable to pay any tax under cargo handling service and consequently, there arises no question of payment of interest and penalty. 7. In view of the above facts and circumstances, I allow both the appeals by setting aside the impugned orders passe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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