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TMI Blog2025 (1) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... ance Act 1994." 2. The facts of the case in brief are that the Appellant is a private limited company, inter-alia engaged in the manufacture and sales of aerated water, mineral water and pulp water-based fruit juices under various brand names viz. Coca-Cola, Fanta, Limca, Thumps Up, Maaza, Kinley etc. classified under Chapter 21 and Chapter 22 the First Schedule to the Central Excise Tariff Act, 1985. 3. The Appellant is a multi-locational manufacturing company carrying out manufacturing activity of the said goods from various locations across the country. One of the key inputs required in the manufacture *of Appellant's final products is "flavored concentrate viz. non-alcoholic beverage base", which is an industrial input exclusively meant for manufacturing of beverages. 4. For procurement of the said concentrates, the Appellant entered into a 'Bottling Agreement' dated 11.10.2004 with the Coca-Cola Company, a corporation organized and existing under the laws of the State of Delaware, United States of America ('the Coca-Cola Company'), wherein, it has been agreed upon the between the parties that the Appellant would buy concentrate only from the Coca-Cola Company or their a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant and CCIPL jointly purchased sale promotional material such as banners, billboards and other publicity or advertisement material. d. Joint campaigns for Cooperate Social Responsibility ("CSR"): - Under this category, various joint campaigns are organized by the Appellant and the CCIPL for activity of CSR. 8. A Show Cause Notice SCN dated 19.04.2012 was issued on the reimbursement of expenses incurred for promotion as paid by CCIPL to Appellant. The Appellant were asked to show cause as to why : a. The Service Tax amounting to Rs. 86,08,557/- (Rs. 83,57,822/- Service Tax + Rs.1,67,156/- Education Cess + Rs.83,579/- Secondary & Higher Education Cess) should not be recovered from them under proviso to Section 73(1) of the Finance Act, 1994 invoking extended period. b. Interest at the applicable rate on the amount mentioned at S. No. 1 above should not be charged and recovered from them under Section 75 of the Finance Act, 1994. c. Penalty should not be imposed upon them under the Section 76 & 78 of the Finance Act, 1994. 9. The Appellant vide letter dated 24.07.2012 submitted their reply in detail before the Respondent. Before adjudication of the Impugned SCN, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue, we find that the Impugned SCN demands Service Tax under Business Auxiliary Service. It has not even referred to any of the seven sub-clauses in Section 65 (19) as to under which sub-clause the disputed service may fall. 14.1 While in the Impugned SCN the nature of service is not specified and relevant sub-section of Section 65(19) of the Act is not invoked, the Adjudicating Authority has traversed beyond the scope of SCN by invoking provisions of Section 65(19)(i) of the Act and gave erroneous finding that the allegations sufficiently disclosed the nature and nomenclature of taxable services alleged to have been provided by the Appellant. 14.2 We also find that the Adjudicating Authority has erred in ignoring that there was no specific reference to a 'taxable service', in the Impugned SCN which was alleged to have been provided by the Appellant. The entire demand in the present case was based on unspecific and vague allegations, the same ought to have been dropped. 14.3 It is settled position of law that it is essential for the SCN to correctly specify the clauses under which the service in question would fall, without specifying the sub-clauses to the Section in the SCN r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ising activity for the flavor concentrate of various brands of CCIPL more specifically falls under clause (i) to Section 65(19) of the Finance Act, 1994. The Respondent has erred in holding that Appellant has undertaken sales promotion, advertisement of flavor concentrate. The sales promotion was undertaken in respect to the beverage which is a product manufactured by the Appellant. Therefore, the observation of the Respondent is not tenable on this count alone. 15.1 The conditions for an activity to be covered under Clause (i) of Section 65 (19) of the Act are not fulfilled in the present case. Clause (i) of Section 65 (19) of the Act defines "Business Auxiliary Service" which can be reads as under : Section 65 (19) " (i) Promotion or marketing or sale of goods produced or provided by or belonging to the client " 15.2 On the bare perusal of the above, it is amply clear that the following conditions are required to be fulfilled for an activity to be covered within the taxable service of Business Auxiliary Service: (a) The activity should be one of promotion or marketing or sale; (b) The said promotion or marketing or sale should be of goods produced or provided or belongi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere under with intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if, for the words "eighteen months", the words "five years" had been substituted." 16.1 the extended period of limitation can be invoked only in cases which involve the following circumstances: - a. Short levy or non-levy of service tax by the person liable to pay service tax. b. Such default in payment of service tax shall be on account of fraud, collusion, wilful misstatement, suppression of facts or contravention of provisions of the Act. c. Such default in payment of service tax must be with the intention to evade payment of service tax. 16.2 The Respondent alleged in the SCN that the Appellant has deliberately kept the service tax authorities in dark of the nature of service rendered by the Appellant and the same could not have been detected if the enquiry was not conducted after the receipt of DGST Modus Operandi Circular. Further, it is alleged by the Adjudicating authority that the revenue would have been lost and hence, an extended period of limitation can be invoked to issue SCN. 16.3 Since w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.8 We find that the Appellant has duly recorded all the transaction in its books of accounts. The Appellant has maintained all the books of accounts as per the provision of law and regularly filed its ST-3 returns. Therefore, no suppression of facts can be held on the part of the Appellant. Reliance in this regard is placed on the following decisions wherein it has been held that suppression cannot be alleged in cases where the facts have been recorded in the books of accounts: (i) Hindalco Industries Limited Vs. CCE, 2003 (161) ELT 346 (Tri-Del) (ii) Rolex Logistics Private Limited Vs. CCE, 2009 (13) STR 147 (Tri-Bang) 16.9 We find that there was no positive act on the part of the Appellant to suppress any information from the Respondent with intent to evade payment of service tax. Therefore, an extended period of limitation cannot be invoked in the present case. In this regard, reliance is placed on the judgment of Pushpam Pharmaceuticals Company vs. Collector of C. Ex., Bombay, 1995 (78) E.L.T. 401 (S.C.), wherein the Hon'ble Supreme Court held that suppression of facts is used in the company of such strong words like fraud etc., and hence, it has to be understood accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of receipt of any found toward service. Further, the appellant is not a service provider to Coca-Cola Company Ltd., they are working on principal to principal basis. Accordingly following the precedent judgment of this Tribunal in the case of Narmada Drinks (P) Ltd. Vs Commissioner of Central Excise, Raipur 2017 (5) GSTL 369 (Tri.-Del.) we hold that the appellant is not liable to pay service tax on reimbursement of such expenses from Coca-Cola Company Limited". 18. Reliance is placed upon the case of Kandhari Beverages Private Limited vs. Commissioner of Central Excise & ST, Chandigarh - II, 2020 (3) TMI 913 - CESTAT Chandigarh wherein in the identical set of facts it is held as under: 2.1 The appellant is engaged in the manufacture of non alcoholic beverages and fruit pulp based products like Maaza under the brand name of The Coca Cola Company (USA) (CCI). They entered into Bottlers Agreement with CCI wherein the appellant had been authorized to use the trade marks in connection with preparation, packing, distribution and sale of beverages in and throughout the specified territory. 2.2 They purchase the concentrates, required for manufacture o the finished products from Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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