Stay Order No. S/108/2012-WZB/C-I(CSTB) in Application No. ST/Stay/2209/2010 in Appeal No. ST/677/2010. Case: Indian Oil Corporation Ltd. Vs Commissioner of Central Excise, Goa. CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal)
| Case Number | Stay Order No. S/108/2012-WZB/C-I(CSTB) in Application No. ST/Stay/2209/2010 in Appeal No. ST/677/2010 |
| Counsel | For Appellant: Shri M. H. Patil, Advocate and For Respondents: Shri V. K. Singh, Addl. Commissioner |
| Judges | Shri Ashok Jindal, Member (J) and P. R. Chandrasekharan, Member (T) |
| Issue | Central Excise Act, 1944 - Section 35F; Finance Act, 1994 - Section 83 |
| Citation | 2012 (27) STR 23 (Tri. - Mumbai) |
| Judgement Date | January 06, 2012 |
| Court | CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal) |
Order:
Ashok Jindal, Member (J)
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The applicant, M/s. Indian Oil Corporation Ltd., is seeking waiver of pre-deposit of Rs. 10,55,03,909/- along with interest and various penalties under the Finance Act, 1994.
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The facts of the case are that M/s. Indian Oil Corporation Ltd. (IOCL) is having an agreement of sale with M/s. Zuari Industries Ltd. (ZIL) for sale of Naphtha and Furnace Oil on High Seas Sale basis. In pursuance to the agreement entered into between the parties, M/s. IOCL imported the above goods and sold the same on High Seas Sale basis to M/s. ZIL. In the agreement of sale there is a bifurcation given to arrive at the value of the goods and as per the agreement the applicant has to charge Rs. 25 PMT on account of additional handling charges and 2.5% of CIF value on account of facilitation charges. The department is of the view that these are the services rendered by the applicant during the sale of goods on High Seas Sale basis, therefore, these services are liable to service tax under the category of ''Business Auxiliary Service''. A show cause notice was issued and service tax demands were confirmed by the impugned order along with interest and various penalties. Against the said order, the applicant are seeking waiver of pre-deposit at this stage.
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Shri M.H. Patil, learned counsel for the applicant appeared and submitted that the transaction between the parties is total sale transaction on principal-to-principal basis and in this case they have entered into an agreement with M/s. ZIL for sale of Naphtha and Furnace Oil. As per the agreement, the goods were cleared provisionally and as the final product was exempt no duty was to be paid but assessable value was arrived at on the basis of the agreement. He further submitted that in the case of Tata Power Co. Ltd. v. Commissioner of Customs, Mangalore - 2009 (240) ELT 742 (Tri.-Bang.) the charges on account of facilitation charges and additional handling charges are held to be includable for arriving at the assessable value. He further submitted that in the case of Pratap Singh & Sons v. Commissioner of Central Excise, Mumbai-I - 2007 (5) STR 389 (Tri.-Mumbai) it was held that when there is an agreement for sale and purchase of the product and element of service is absent no service tax can be charged on the services included in the value of the goods. He further drew our attention in their own case wherein the Commissioner of Central Excise (Appeals), Mangalore, in...
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