The Customs, Excises, and Service Taxes Appellate Tribunal (CESTAT), Kolkata Bench deleted the service tax on consignment agency services under “clearing and forwarding agent service” allegedly rendered to Tata Steel Limited.
The Commissioner has confirmed service tax demands of Rs.8,86,82,006 and Rs.2,37,88,670 respectively against the appellant, M/s. Tinplate Company of India Limited under the Proviso to Section 73(1) of the Finance Act, 1994, along with interest in terms of Section 75 of the Act. Penalties of Rs.9 crores and Rs. 2,37,88,670 respectively under Section 78 of the Act and Rs. 5000 and Rs. 10,000 respectively under Section 77 of the Act have also been imposed upon the appellant. The first order adjudicated eight periodical show cause notices whereas the second order adjudicated two periodical show cause notices.
In all the 10 show cause notices it was alleged that the appellant had received consignment agency charges of Rs.250 and Rs.275 respectively as per the agreement dated March 30, 1998 from TSL but had failed to discharge proper service tax on the same. On the said basis demands of service tax payable but not paid were made.
The appellant contended that although it had entered into a consignment agency agreement with TSL, this agreement was never acted upon by the parties. The appellant also did not receive any amount for acting as a consignment agent or towards providing any consignment agency service under the said consignment agency agreement and the said consignment agency agreement remained inoperative.
The Coram consisting of P.K.Choudhary and P.Anjani Kumar while deleting the service tax demand noted that although the appellant had entered into the consignment agency agreement with TSL this agreement was never acted upon by the parties. The appellant also did not receive any amount from TSL as and by way of a consignment agent or towards providing any consignment agency service under the said consignment agency agreement. No evidence to the contrary is available from either the show cause notices or the impugned orders.Subscribe Taxscan AdFree to view the Judgment