In a major relief to M/s. Aspinwall and Company Ltd, the appellant, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), held that services by ASPIN on turnkey basis are Customs House Agent (CHA) Services, taxable as per Central Board of Excise and Customs (CBEC)Circular.
The facts of the case are that ASPIN, a public limited company, was registered under the categories of ‘Customs House Agency Service’ (CHA), ‘Steamer Agency Services’, ‘Technical Inspection, Analysis and Certification Services’, ‘Cargo Handling Services’, ‘Port Services’ and ‘Transport of Goods by Road Services’ as per the provisions of the Finance Act, 1994.
A case was registered against them by Headquarters Preventive Unit of the Commissioner of Central Excise, for failure of the assessee to correctly pay service tax on taxable value as per Section 67 of the Finance Act, 1994 resulting in a short-payment of Service Tax and Education Cess totally amounting to Rs.1 crores for the periods 2004-05, 2005-06 and 2006-07.
The Counsel for the appellant, Harish Bindhumadhavan has stated at the outset that the impugned order is based on a Show Cause Notice which is barred by limitation. The Counsel then referred to Central Board of Excise and Customs (CBEC) Circular F. No. B43/1/97/TRU dated 06.06.1997 to state that since the consideration received by them was a lumpsum amount from their clients towards CHA services and also towards reimbursement of expenses like statutory levies, they were liable to pay service tax on 15% of the lumpsum amount received.
M. Ambe representing Revenue, stated that on scrutiny of data available on ASPIN’s computers and ST3 Returns for the years 2004-05 to 2006-07 it appeared that ASPIN had provided various services to their clients and suppressed the taxable value by maintaining two accounts i.e. one private account accessible only to their employees and another for the department and that ASPIN apart from providing CHA services were also providing ‘cargo handling services’ and ‘clearing and forwarding services’ under the nomenclature of Customs Clearance Business.
The Bench of P. Dinesha, Member (Judicial) and M. Ajit Kumar, Member (Technical) observed that “We accordingly hold that the services rendered by ASPIN on turnkey basis during the period under appeal would fall under the category of CHA Services and the value of taxable service has to be computed in the manner stated at paragraph 2.5 of the C.B.E.C. Circular dated 06.06.1997.”
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