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TMI Blog2015 (8) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... M / M/s.MLL and M/s.AMW Ltd. The petitioner cannot be said to be a sub-contractor with respect to the transportation services provided to M/s.AMW Ltd. and therefore, the contention on behalf of the petitioner that M/s.MM / M/s.MLL paid service tax on the transportation services rendered to M/s.AMW Ltd. and therefore, the petitioner is not liable to pay service tax and/or the contention that there shall be double taxation if the tax is recovered from the petitioner, has no substance and the same cannot be accepted. The service tax paid by M/s.MM / M/s.MLL with respect to transportation services provided to AMW is with respect to the separate and independent contract entered into between M/s.MLL and M/s.AMW Ltd. and the services rendered by M/s.MM / M/s.MLL to M/s.AMW. The agreement / contract entered into between the petitioner and M/s.MM / M/s.MLL is an independent contract for providing services of transportation and therefore, the petitioner is not a subcontractor and therefore, the petitioner is liable to pay service tax on the transportation services / bus services provided by the petitioner to the M/s.MM / M/s.MLL. Under the circumstances, the petitioner is not entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 65(105)(J), Tour Operators Service falling under section 65(105)(N), Travel Agent (other than Air and Rail travel Agent) falling under section 65(105)(ZZX) and Transport of Goods by Road falling under section 65(105)(P), of Finance Act, 1994. 2.02. It appears that based upon the intelligence forwarded by DGCI that the petitioner is indulging in evasion of service tax on the services rendered under the category of Clearing and Forwarding Services , an inquiry was initiated against them. That during the course of the investigation / inquiry, it appeared that the petitioner - noticee was providing services to different clients for contracted tour and providing bus services on contract basis. It also appeared that they also rendered services for bus ticket booking on commission basis and clearing and forwarding agent services, which were liable to service tax under the category of Tour Operator Service, Travel Agent (other than Air/Rail travel agent) service and clearing and forwarding service. 2.03. It was also found that the petitioner - noticee was holding service tax license under all above categories and they issued service bills charging service tax from the th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loor, Central Excise Bhavan, Race Course Ring Road, Rajkot within 30 days from the receipt of this notice as to why :- (I) Service Tax of ₹ 1,14,19,223/-, Education Cess of ₹ 2,28,385/- Secondary Higher Secondary Education Cess of ₹ 1,14,192/- totally amounting to ₹ 1,17,61,800/- should not be recovered under proviso to Section 73(1) of the Finance Act, 1994. An amount of ₹ 81,14,376 paid under different challans should not be appropriated against service tax liability; (II)Interest at the applicable rate on the said amount of Service Tax should not be recovered from them under Section 75 of the Finance Act, 1994; (III)Interest on delayed paid service tax of ₹ 1,21,17,344/- should not be recovered from them under section 75 of the Finance Act, 1994. An amount of ₹ 1,11,032/- already paid should not be appropriated against such interest liability; (IV)Late fee should not be recovered from them under Section 70 of the Finance Act, 1994 read with Rule 7C of the Service Tax rules, 1994 for failure to file ST-3 returns in time; (V)Penalty should not be imposed upon them under Section 76 of the Finance Act, 1994 for failure to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion, a report from the respondent No.3 was called as regards petitioner's submission in the application, more particularly demand of service tax with respect to the services provided to Ms.RPL as well as M/s.MLL (According to the petitioner, the services were provided to M/s.AMW.). 2.09. The third respondent - Commissioner of Central Excise, Rajkot submitted a report on the aforesaid. That thereafter, after considering the submissions made on behalf of the respective parties, the Settlement Commissioner has passed the impugned order dated 23/3/2015 accepting the petitioner's submission for deducting demand of ₹ 5,45,824/- in respect of service rendered to M/s.RPL, Jamnagar. However, the petitioner s prayer for setting aside deleting demand of ₹ 31,01,500 in respect of bus services provided to M/s.AMW Ltd. (in fact, it should be M/s.Mahindra Logistics Ltd.) has been rejected by rejecting the claim made on behalf of the petitioner that the petitioner is a subcontractor of M/s.MLL and that M/s.MLL was the main contractor of M/s.AMW Ltd. Therefore, by the impugned order, the learned Settlement Commission has confirmed the demand of ₹ 31,01,599/- in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce tax to M/s.AMW Ltd. for providing transportation services for the employees of M/s.AMW Ltd. It is submitted that therefore, by very nature of the above arrangement, the obligation to discharge services tax liability for the aforesaid services namely Tour Operator Services lay on M/s.MLL and the said contractor has been actually discharging services tax liability on the entire amount billed and received by their client M/s.AMW Ltd. It is submitted that, therefore, the Settlement Commission has materially erred in confirming the demand notice with respect to service liability to the extent of ₹ 31,01,599/- with respect to transportation services provided to M/s.AMW Ltd. 3.02. Mr.Paresh Dave, learned advocate appearing on behalf of the petitioner has further submitted that as such the petitioner submitted application before the Settlement Commission under section 32F of the Central Excise Act (hereinafter referred to as the Act for short). It is submitted that Chapter V of the Act makes the provision for setting the case and the said provisions are made applicable for settlement of demand of service tax also. It is submitted that any assessee is allowed to make applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 191. 3.06. Mr.Paresh Dave, learned advocate appearing on behalf of the petitioner has heavily relied upon the following decisions of the various tribunals in support of his submission that if the service tax is paid by the main contractor, subcontractor is not liable to pay service tax :- (1) SEMAC Pvt. Ltd. Vs. Commissioner of Service Tax, Banglore, reported in 2006 (4) S.T.R. (Tri. - Bang.); (2) OIKOS Versus Commissioner of C. Ex. Banglore-III, reported in 2007 (5) s.t.r. 229 (Tri. - Bang.); (3) Messers Mahalaxmi Infracontract Ltd. Vs. Commissioner of Service Tax, Ahmedabad, rendered in Order No.A/11314/WZB/AHD/2013 dated 7/10/2013 and (4) Sunil Hi-Tech Engineers Ltd. Vs. Commissioner of C.Ex., Nagpur, reported in 2014 (36) S.T.R. 408 (Tri. Mumbai). By making above submissions and relying upon the above decisions as well as the above Circulars issued by the CBDT (sic), Mr.Dave, learned advocate appearing on behalf of the petitioner has requested to admit/allow the present Special Civil Application. 4.00. Heard Mr.Paresh Dave, learned advocate appearing on behalf of the petitioner at length. 4.01. At the outset, it is required to be noted that the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same, by no stretch of imagination, it can be said that the petitioner is subcontractor for providing transportation services to Ms.AMW Ltd. On considering the entire contract / agreement between the petitioner and M/s.MLL, it is an independent contract between the petitioner and M/s.MML to provide buses to M/s.MLL. In the said agreement, M/s.Mahindra Mahindra Limited is referred to as M M-ML , the petitioner herein - M/s.Eagle Corporation Pvt. Ltd. is referred to as BA and Service Level Agreement is referred to as SLA for short. As per the said agreement / contract dated 16/3/2008, the petitioner is appointed as a transporter to transport the employees of customer from pick up point to plant and back and managing interplant vehicles movement. Article 5 of the said agreement / contract dated 16/3/2008 reads as under :- Article 5 : Service fee and conditions : 5.1. In consultation of BA, providing the Services to M M-ML, M M-ML, shall pay to BA, a sum / amount, as more specifically mentioned in Annexure-A as transport charges. The said amount shall be inclusive of all taxes except as mentioned in the Annexure-I or SLA and comprehensive vehicle insurance. Any increa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licants have further claimed that M/s.Mahindra Logistics Ltd. were the main contractors of M/s. MAW and that M/s. Mahindra Logistics Ltd. have since discharged the service tax in respect of the buses supplied by the applicant directly to M/s.AMW. The Bench notes that the applicants had not been able to provide any documentary evidence to correlate the service tax paid by M/s.Mahindra Logistics Ltd. and the buses provided by the applicant to M/s.AMW. It is quite possible that M/s. Mahindra Logistics Ltd. could have been providing some related ancillary services to M/s.AMW for which they could be raising a consolidated bill to M/s.AMW and it would be virtually impossible to link each bill raise by M/s.Mahindra Logistics Ltd. to M/s.AMW with the bill raised by the applicant on M/s.Mahindra Logistics Ltd. Even otherwise, so far as the applicants are concerned, they have provided service to M/s. Mahindra Logistics Ltd. and not to M/s.AMW since the contract was with M/s.Mahindra Logistics Ltd., the bills were raised by the applicant on M/s.Mahindra Logistics Ltd. and payments were also received by the applicant firm from M/s.Mahindra Logistics Ltd. There is no provision in service tax la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernate to regular and normal adjudication proceedings is concerned, considering the provisions of the Act more particularly Section of Chapter V of the Act, by no stretch of imagination it can be said that the proceedings before the learned Settlement Commission is an alternate to adjudication proceedings. The proceedings before the Settlement Commission can be said to be in the form of conciliation and it gives an opportunity to the assessee to approach the Settlement Commission by submitting application and accepting the liability by disclosing true and correct facts which are necessary for the purpose of determination of amount of tax / demand of tax. As per example show cause notice is issued with respect to evasion of A amount and the assessee / noticee approaches the Settlement Commission accepting the liability to the extent of B amount by declaring true and correct facts, on payment of the amount of B amount with interest, in that case, the Settlement Commission is required to adjudicate the dispute with respect to the balance amount i.e. amount A-B (A minus B) and for which the Settlement Commission is required to follow the procedure as required under section 32F of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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