Pradeep Jain - Chartered Accountant

PJ/Case Laws/2012-13/1148

Case: M/S THE MYSORE SUGAR COMPANY LTD V/S COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX, MYSORE

Citation: 2012-TIOL-772-CESTAT-BANG

Issue:- Whether the assessee is liable to pay service tax on of transportation of sugarcane from fields to factory, freight paid by farmers reimbursed by appellant?

Brief Facts: - There are two applications, one for condonation of the delay of the appeal and the other for waiver and stay. The impugned order was received by the appellant on 09.01.2010 and the appeal was filed on 24.01.2011 with a delay of 291 days from the date of expiry of the statutory period. The explanation for this delay comes through the CoD application coupled with a memo dated 15.09.2011 for the appellant and an affidavit dated 17.10.2011 of the General Manager of the company.

The next application seeks waiver of pre-deposit and stay of recovery in respect of an amount of Rs. 18,42,192/- demanded as Service Tax and Education Cess for the period from September, 2005 to March, 2006 and also in respect of equal amount of penalty imposed under Section 78 of the Finance Act, 1944. The demand of tax is under the head 'GTA services' and the same is on the freight paid for transportation of sugarcane from the fields to the applicant's factory by the farmers and subsequently reimbursed to them by the applicant.

Appellant’s Contention: - The appellants contended that one Mr. H.S. Ranganath, Manager-Accounts had left the company upon expiry of his employment tenure on 31.05.2010 without handing over the records, including a copy of the impugned order. It is further stated that it was only in the month of November, 2010 that the appellant came to know about their tax liability from the Central Excise Department. It is also stated that the appellant company had been declared sick by BIFR on 29.09.2010, and that, on account of that situation and also of the fact that the company had been maintaining only skeletal staff during the material period (off season), they could not trace out the copy of the impugned order for filing the appeal without further delay. The appellant, in this context, referred to Office Order dated 15.11.2010 of the Financial Adviser & Company Secretary addressed to Shri H.S. Ranganath (copy available on record) and has submitted that the company was pursuing their request for handing over the records. Ultimately, the records could be traced out only towards the end of November, 2010. The affidavit states that, soon thereafter, the records were supplied to advocate for drafting the appeal. Eventually, the appeal was filed on 24.01.2011.

The appellant further submits that the transportation was not undertaken by any Goods Transport Agency and that the tax cannot be demanded from the appellant on the amounts reimbursed to the farmers. He further claims support from Stay Order No.1344/2011 dated 14.12.2011 passed by this bench in Appeal No.ST/773/2011 (Chamundeshwari Electricity Supply Corporation Limited vs. Joint Commissioner).

Reasoning of Judgment: - The Hon’ble Tribunal held thatin the peculiar facts and circumstances of this case, the CoD application filed by the appellant (a Government company) has to be allowed. The circumstances referred to by the appellant are prima facie believable. The CoD application is, therefore, allowed. Further appellant has made out a prima facie case against the demand of Service Tax on the facts and circumstances of this case and in view of the stay order cited by the appellant, wherein waiver and stay were granted against a similar demand of service tax on transportation of goods by individual transporters. In the result, there will be waiver of pre-deposit and stay of recovery in respect of the adjudged dues.

Decision: - Wavier of pre-deposit and stay application was allowed.

Comments

PJ/Case Laws/2012-13/1148

Post a Comment

Query