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TMI Blog2017 (6) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... ilways. The assessee cannot collect freight from the customers unless authorized by the Railways. For this reason, the issuance of railway receipts and collection of freight is definitely rendered on behalf of Railways and the remittances of the amount in Reserve Bank of India is also rendered on behalf of Railways which would make the services rendered on behalf of client. The Consultant has made a frail effort to establish that being transportation of goods by rail the services if any would fall under Sec 65(105)(zzzp) and such transportation being through government railways, it is not exigible to tax. The activities carried out by the assesse, are not mere transportation of goods by rail, but the billing, collection of freight, remittance etc. Therefore this ground fails. When the assessee is receiving Terminal Handling Charges for the services rendered to Railways and when Sl. Nos. 12, 13 and 14 would qualify for Business Auxiliary Service as taxable services, it is for the assessee to give the charges collected for each of the 14 services and to prove that such THCs do not apply to the services other than Sl. No. 12, 13 and 14. Extended period of limitation - Held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how cause notices were issued alleging non-payment of service tax on THC and proposing to recover the differential of service tax along with interest as also imposition of penalties. After due process of law, the adjudicating Commissioner vide impugned Order No.16/2006 dated 11.5.2006 confirmed the demand of service tax along with interest, however did not impose penalties. Against the non-imposition of penalties in Order-in-Original No.16/2006 the department has filed appeal No.ST/181/2006. The other appeals are filed by the assessee aggrieved by the demand of service tax, interest and penalties imposed for the subsequent periods. The period involved, amount of tax demanded and penalties imposed are given in the Table below as furnished by the assessee:- SI No. Appeal No. OIO No. Material Period Amount of Tax challenged (Rs.) Penalty Involved Type of Receipt 1. ST/178/2006 16/2006 01.07.2003 to 31.01.2004 51,11,738 No THC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Business Auxiliary Services was amended and clause (vi) was added to Section 65(19) whereby the services provided on behalf of a client were also brought into the ambit of the definition. Even after such amendment, the activities would not be covered under BAS since the assessee is not providing any services on behalf of a client. That no services whatsoever is rendered by the assessee on behalf of Southern Railways to any other person for which the THC is received by the assessee. To satisfy subsection(vi) of Section 65(19) it requires three parties. In the case of assessee, while rendering the services of billing, collection of freight, remittance to RBI etc., there are only two parties, namely, assessee and Southern Railways. As there is no third person involved, the requirements under this sub-section of Sec.65(19) as amended from 10.9.2004 is not fulfilled and accordingly the activities would not fall within the definition of Business Auxiliary Services with effect from 10.9.2004 also. In addition it was submitted that vide Notification No. 25/2004 dated 10.9.2004, the services rendered on behalf of the client prior to 10.9.2004 were exempted. For this reason also, no se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is considered to be falling under the definition of BAS: Admittedly the OIO has held only 3 out of the total of 14 services to be falling under the definition of BAS. Taxing this consideration meant for a bundle of 14 services is not permissible since there is no machinery provision to vivisect this consideration. (v) There is no authority to demand tax: There is no authority to demand service tax since (i) the term of person chargeable with the service tax used in section 73 is not-defined in law and (ii) the appellant, namely a service provider , is not included rule 2(1)(d) of STR 2004 which defines the term person liable for paying the service tax . This legal lacunae has been cured by amendment to rule 2(1)(d) by including service provider in rule 2(1)()d(ii) w.e.f. 01.07.2012. (vi) Demand of interest is invalid since it is not show caused: Interest demanded in the OIO is not show caused in the SCN and consequently demand of interest is invalid. 8. The Misc. application was strongly opposed by the learned AR Shri K. Veerabhadra Reddy, who submitted that the appellant has not put forward any of these grounds before the adjudicating Commissioner and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t no service tax can be demanded from any person prior to 01.07.2012, as the person liable to pay Service Tax was not defined during the period. It is very much clear from the above additional grounds raised that the appellant is trying to built up a new case which was never put forward in the reply to show cause notice or at the time of personal hearing or at the time of filing this appeal. 10. In the case of Warner Hindustan Ltd. Vs. Collector of Central Excise, Hyderabad reported in 1999 (113) ELT 24 (SC) , the Hon ble Supreme Court held that it is not permissible to build up a new case at the Tribunal stage. Similar view was taken in the case of Sree Vishnu Electronics Vs. Commissioner of Central Excise, Chennai II reported in 2015 (326) ELT 113 (Mad.) and in Ram Gopal Kudal Vs. Additional Customs. - 2016 (334) E.L.T. 50 Mad. 11. From the discussions above, it is explicit that the additional grounds are entirely new grounds in the nature of a new case put forward by the assessee for the first time before the Tribunal. We, therefore, are of the considered opinion that such additional grounds cannot be permitted at this appellate stage. Miscellaneous applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppressed the THC received. It has come to light only during audit. Therefore the demand raised invoking the extended period of limitation is legal and proper. 13. We have considered submissions made by both sides. 14. The Learned Consultant, Sh. Meenakshi Sundaram has made elaborate arguments which were mainly focused on the additional grounds raised in the miscellaneous application. Under an agreement called Working Agreement entered by assesse with Southern Railway, the assessee undertook the activity of transporting Cargo (both imported and exported) between the dock and the entry point of the Port. It is the Railways who directly undertake transportation from and upto this entry point. Within the Port area, the assessee undertakes the activity of unloading / loading the cargo from/to the vessel to the railway wagons. The wagons are owned by Railways. The consideration for the services for loading unloading/transportation was collected by assessee by cheque drawn in favour of Railway. The assessee issued the Railway receipts to the cargo owners/customers. The amount collected was then deposited in RBI by assesse in favor of Railways. For such services the assesse received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purposes of this clause information technology service means any service in relation to designing, developing or maintaining of computer software, or computerized data processing or system networking, or any other service primarily in relation to operation of computer systems; (19) business auxiliary service means any service in relation to (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services, which are inputs for the client; or (v) production of goods on behalf of the client; or (vi) provision of service on behalf of the client; or (vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision, and includes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omers unless authorized by the Railways. For this reason, the issuance of railway receipts and collection of freight is definitely rendered on behalf of Railways and the remittances of the amount in Reserve Bank of India is also rendered on behalf of Railways which would make the services rendered on behalf of client. 18. From the above discussions we find that the demand of service tax under Business Auxiliary Service is correct and proper. 19. Before we part, even though the Misc. application for receiving additional grounds stands dismissed we would like to address the same. The sum and substance of these additional grounds is that the activities are not exigible to tax. The Consultant has made a frail effort to establish that being transportation of goods by rail the services if any would fall under Sec 65(105)(zzzp) and such transportation being through government railways, it is not exigible to tax. The activities carried out by the assesse, are not mere transportation of goods by rail, but the billing, collection of freight, remittance etc. Therefore this ground fails. Another additional ground put forward by the assessee is that the Terminal Handling Charges are recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants did not seek or obtain additional registration under Business Auxiliary Service even after the issue of the first impugned order of the Commissioner dated 11.5.2006. Viewed in this light, we are unable to find any infirmity with the finding of the adjudicating authority in the impugned orders, justifying invocation of extended period. Ffor example, in Order-in-Original No. 77/2007 dated 16.5.2007 para 18.5:- As regards extended period of time limit, it is to be stated that the assesse himself accepted that they are liable to pay Service tax under Business Auxiliary Service. In fact, they have paid the Service tax along with interest under Business Auxiliary Service from 01.07.2003 to 31.01.2004. However, they have not taken for consideration the Terminal Handling Charges for payment of Service tax nor did they include in the determination of taxable value as declared in the S.T.3 Returns or in any manner amounts to suppression of fact with intent to evade payment of Service tax. Therefore, extended period of limitation under proviso to Section 73 of the Act is applicable for demand of Service tax and Education Cess. The assessees are also liable to penalty under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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