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TMI Blog2011 (12) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... scription Job Code Unit Unit Rate 1. Urea Product Handling Bagging Bagging and stitching-including checking 570101101100 Metric Tonn 3.01 2. Urea Product Handling Begging Wagon Loading-Receiving bags in wagon loading platform through the loader, and loading it into the wagons including the Tally checking. 570102101101 Metric Tonn 6.30 3. Urea Product Handling Bagging Wagon Loading-Manual direct loading of the wagons wherever the wagon loaders are not reaching-including the tally checking 570102102101 Metric Tonn 6.74 4. Urea Product Handling Bagging Wagon Loading-Stacking of filled bags on the wagon loading platforms-and loading into the wagons including tally checking 570102103101 Metric Tonn 12.82 5. Urea Product Handling Bagging Wagon Loading - Loading of the wagon from a distance of 50 feet and above - in case the wagon loading are not available due to maintenance etc . including tally checking. 570102104101 Metric Tonn 15.83 6. Urea Product Handling Bagging Truc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct Handling Bagging Miscellaneous Jobs - Tarpaulin covering and tying of rope on all sides for open Wagon. 570107102100 Per Wagon 10.38 17. Urea Product Handling Bagging Miscellaneous Jobs - Rivet/bolt removal from door, door opening- and closing the door after loading riveting back, tying the seal card, applying lac and putting CFCL siding seal for covered wagons. 570107103101 Per Wagon 10.38 18. Urea Product Handling Bagging Miscellaneous Jobs- Housekeeping and cleaning of bagging plat, building, silo, conveyor, screenhouse surrounding conveyor, conveyor pantry, shifting of urea lamps, torn bags, packing material etc. to the location marked by CFCL's representative and other related jobs-Godempan-II bagging area. 570107104101 Months 88124 19. Urea Product Handling Bagging Miscellaneous Jobs- Housekeeping and cleaning of bagging plat, building, silo, conveyor, screenhouse surrounding conveyor, conveyor pantry, shifting of urea lamps, torn bags, packing material etc. to the location marked by CFCL's representative and other related jobs-Godempan-II bagging area. 57 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d trucks and has enclosed certain photographs of such handling system. But the description work as in table above does not prove the contentions. At the most the work specified at S. No. 6 and 7 can fit into this category and the photographs submitted appear to relate to these activities. 5. Further, they also argue that the demand is time-barred because they were under the bona fide belief that the activity, they were doing, was not covered by the entry 'Cargo Handling Services' under Finance Act, 1994 and that is the reason why they did not take registration and pay service tax. They argue that mere failure to make declaration does not amount to mis-declaration or wilful suppression. They argue that a positive act to establish either wilful mis-declaration for wilful suppression is a must for invoking the extended period of limitation of five years prescribed under section 73 of Finance Act, 1994. They rely on the following decisions of the Apex Court: ( i ) Pahwa Chemicals (P.) Ltd. v. CCE 2005 (189) ELT 257 (SC); ( ii ) Collector of Central Excise v. Chemphar Drugs Liniments 1989 (40) ELT 276 (SC). Thus the counsel argues that the demand is not sustaina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t facts of the cases quoted and a few other cases are examined below. 9.1 Paras 2 and 3 of the decision in the case of Pahwa Chemical (P.) Ltd. ( supra ) are extracted below: "2. We find that there is no dispute to the fact that the classification list had been approved by the Sector as well as Range Officer after carrying out verification. Between the Department and the Appellants there had earlier been dispute regarding classification of this product. On 31st October, 1991 Excise Preventive Officers had intercepted one consignment of the Appellants in transit and seized goods which contained labels of foreign brand name. All the RT-12 returns were being regularly filed. The invoices containing description of the goods have all been regularly approved by the Department. 3. The Appellants have all along claimed that merely because they were affixing the label of a foreign party, they did not lose the benefit of Notification No. 175/8b-C.E. as amended by Notification No. 1/93-C.E. The view taken by the Appellants had, in some cases, been approved by the Tribunal which had held that mere use of the name of a foreign party did not disentitle a party from getting benefit of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly the value of P P medicines manufactured and cleared by it during the preceding financial year i.e. 1979-80, and the respondent did not furnish the particulars of the value of the goods cleared under Tariff Item 68 during the financial year 1979-80. It was noticed that the manufacturer did not file any declaration under Notification No. 111/78 dated 9-5-1978 claiming exemption from the licensing control. 5. However, on 30th July, 1980 the firm filed a classification list in Respect of P P medicines claiming exemption under Notification No. 80/80. A show-cause notice was issued to the respondent who was asked to explain as to why excise duty in respect of Patent and Proprietary medicines manufactured and cleared by it should not be demanded under proviso (a) to Rule 10(1) of the Central Excise Rules and why penalty should not be imposed on it under Rule 173Q of the Central Excise Rules, 1944 for having cleared the goods without payment of duty in contravention of Rule 173Q (a) and (d) of the Central Excise Rules." 9.3 In the context of the above facts the findings of the Honourable Court in para 8 of the order is reproduced below: "8. Aggrieved thereby, the revenue has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndicrafts and were eligible to the exemption contained in the Notification No. 55/75, dated 1st March, 1975. "The appellants at all relevant times were manufacturing agarbatis, dhoop sticks, dhoop coil, dhoop powder falling under Tariff Item No. 68 of the erstwhile Central Excise Tariff. The relevant period involved in the present Civil Appeal is from the year 1979 to 1983-84. The appellants claimed exemption under Notification No. 55/75, dated 1st March, 1975. By the said notification, the Central Government had exempted goods of the description in the Schedule annexed to the notification and falling under Tariff Item 68 of the First Schedule to the Act from the whole of duty of excise leviable thereon. In the Serial No. 8 of the Schedule to the said notification, 'Handicrafts' were listed. It is, therefore, clear that 'handicrafts' were fully exempt from payment of duty of excise, according to the appellants. Under the Notification No. 111/78, dated 9th May, 1978, the appellants were exempted from licensing control. That is the case of the appellants." 9.5 The sentence underlined in the extracts of the case of Chemphar Drugs Liniments ( supra ) and similar observations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. Ltd. (for short 'Anurang') which in turn is based on the purchase price of aluminum ingots supplied by M/s. Bajaj Auto Ltd., Waluk, Aurangabad (for short 'Bajaj'). Anurang, who is Respondent No. 4 in this appeal, is engaged in the manufacture of aluminium castings, commonly known as "handle bar body", "crank case clutch", and castings used as motor vehicle parts, classifiable under Chapter sub-heading 8708.00 and 8714.00 of the Central Excise Tariff Act, 1985. Bajaj, the Respondent No. 1, was supplying inputs - aluminum ingots after purchasing the same from other manufacturers to Anurang for the relevant period under the cover of invoices issued under Rule 57F(2) and Rule 57(3) of the Central Excise Rules, 1994, after reversing the MODVAT credit availed on the said input. 3. A show-cause notice dated 5-3-2001 was issued by the Commissioner of Customs and Central Excise, Aurangabad, in which it was alleged that Anurang was receiving inputs from Bajaj at an undervalued landed cost by not including expenses on account of sales tax, octroi, freight, insurance, loading unloading charges and handling charges, and that Bajaj was charging only the basic price of such inputs equal to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been filed by the assessee, the special period of limitation shall be applicable. 9.10 There are more such cases like the following: ( i ) Box Carton India (P.) Ltd. v. Commissioner - 2010 (255) ELT A13 (SC) ( ii ) Modipon Fibre Co. v. CCE 2007 (218) ELT 8 (SC) (This decision is also worth studying because the ruling is to the effect that Suppression is not about making a false declaration but also about not declaring what should be declared.) 10. In view of the above facts in each case certain relevant points are to be noted. 10.1 First point is the observation of the Apex Court in the case of para 8 of Chemphar Drugs Liniments ( supra ) as under: "Whether in a particular set of facts and circumstances there was any fraud or collusion or wilful misstatement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case." 10.2 If there cannot be general rule, the rule of "positive act of suppression" itself cannot be a general rule for reasons as explained below. 10.3 Suppression with intent to evade payment of duty is seldom done by actions leaving trail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f suppression is examined basically with reference to two issues- one whether the department had an opportunity to know about all the relevant matters and secondly whether the assessee had reasonable cause with reference to clarifications issued by the department or decisions given by the court to bona fidely believe that he was not liable to pay the disputed tax. 11. In the case of service tax there are two additional factors involved. Firstly the matter quite often involves intangibles, which can be seen mainly through concerned contracts or through the outcomes of service. The next issue is that because the levy is not administered by taxing all services and exempting specified services but by a system of taxing specified services. These factors, can in the facts of some cases, persuade a judicial mind to conclude that there was no wilful suppression. 12. Now let us consider the facts of the present case. At least 15 out of the 22 items of work specified are about loading of cargo. Some of the other items of work also have nexus to such cargo handling. The definition of the relevant entry in Finance Act, 1994 covers loading as also of unloading of cargo. By a simple un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 75A and 77 also are for almost the same offence. In fact section 75A was omitted from 10-09-2004 and was not in existence when the not in existence when the SCNs were issued. So the penalty under section 75A also is waived. Penalty under section 77 is to be paid. [Pronounced in Court on] Ms. Archana Wadhwa, Judicial Member - I have gone through the order proposed by my learned brother and with due respect, I differt with the same. As detailed facts already stands recorded in the said order proposed by my learned brother, the same are not being repeated. 16. As regards the merits of the case, I find that the appellants have taken a categorical stand before the authorities below that they have only provided labour/labourers to do the work of sealing of bags and loading and unloading of wagons. As such, they are manpower supplier agency and the entire loading and unloading or packing work is fully mechanized. They have further submitted that automatic filling machine and conveyor carries bags and loader machines are in the ownership of CFCL and they have no control on the said machinery. Packing and loading activity was, in fact, continuous process to the manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision on merits, in the light of the Board's Circular as also the decisions of the Tribunal and Hon'ble Rajasthan High Court. The order is required to be passed after considering the detailed activities undertaken by the appellants, as appearing in the contract. 19. In any case, I find that the show cause notice stands issued on 27.7.05 for the period August,2004 to July, 2004 and as such is barred by limitation. On going through the order of the Joint Commissioner, I find that he has not discussed the issue of limitation. It is only in the context of imposing penalty under section 78 of the Finance Act that he has observed that the assessee had wilfully suppressed the fact for providing services to the customers with intention to evade payment of service tax and as such they are liable to penalty under the said section. Similarly, I find that the Commissioner (Appeals) has also not given any finding on issue of time bar, though this specific ground, was raised in the memo of appeal. 20. Learned Advocate appearing for the applicant has strongly contested the demand on the point of limitation by submitting that the extended period of limitation is available to the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dences reflecting upon the appellants' mala fide , and keeping in view that the matter stands remanded on merits, I deem it fit to remand the matter back to the original adjudicating authority for reconsideration of the appellants' plea of demand being barred by limitation. 21. Accordingly, I am of the view that the impugned orders are liable to be set aside and the appeal to be remanded for fresh decision on merits as also on limitation. As the matter is being remanded to the original authority for reconsideration on merits, the issue of penalty is also to be re-adjudged by him depending on the outcome of the order on merits and on limitation. Difference of Opinion ( i ) Whether the appellant has to be rejected on merits as held by learned Member (Technical) or the same is required to be remanded for reconsideration as held by Member (Judicial). ( ii ) Whether the invocation of longer period of limitation has to be upheld as observed by the learned Member (Technical) or the matter is required to be remanded for deciding the issue on merits afresh as held by Member (Judicial) ( iii ) Whether the penalty is to be imposed under section 78 has to be upheld to pay 25% ..... X X X X Extracts X X X X X X X X Extracts X X X X
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