UB Xpress South Pvt. Ltd. vs CESTAT

T.S. Sivagnanam, J.—This appeal is directed against the Miscellaneous Order passed by the Customs, Excise and Service Tax Appellate Tribunal (hereinafter called as the "Tribunal"), Chennai in Miscellaneous Order No. 40120/2014, dated 13-1-2014, by which, the Tribunal directed the appellant, to pre-deposit a sum of Rs. 10 lakhs within eight weeks and to report compliance on 19th March, 2014. The appellant seeks admission of the above CMA by raising the following substantial questions of law:- "1. Whether the Tribunal was correct in not considering the subtle ground canvassed by the appellant herein before it that the classification of their activity only for the interregnum period between 1-5-2006 to 22-8-2007 under business Support Service, even when the Board Circular dated 31-10-1996 issued in F. No. 341/43/36-TRU, categorically clarified that the charges received by a co-loader are not to be included in the gross amount of taxable service rendered by the courier agency?

Whether the Tribunal was correct, in refusing to consider the issue of time bar by doubting the activity of the appellant as a co-loader even when the revenue in the show cause notice issued by them have categorically averred that the co-loading activities rendered by the appellant for the interregnum period fell within the ambit of the taxable Business support service and confirmed the demand accordingly?

Whether the Tribunal was correct in refusing to consider the time-bar issue, which as per the statutory provisions and the settled law is dependent, on the conscious or deliberate intention held by an assessee to evade service tax and not on whether the consideration was received as a co-loader or otherwise, particularly when the very same bench has taken the view in the case of one Professional International Courier (P) Ltd. v. C.C.E., Chennai-II reported in 2013 (31) S.T.R. 561 (Tri.-Chennai) that the non-payment of service tax for the interregnum period based on Board Circular, would render the demand barred by limitation?

Whether the Tribunal, was correct in overlooking the substantial evidence placed on record by the appellant herein to establish that their activities fell within the ambit of "Export of Service" not attracting the rigors of service tax, by recording an incorrect finding on the face of record that the amount said to be paid to the appellant in terms of the two letters is far short of the disputed value of service tax, whereas the facts are not so?"

On a reading of the order passed by the Tribunal, it is seen that it was a second round of litigation before the Tribunal. The appellant is engaged in the business of providing Courier Agency Services and is registered for payment of service tax. They had also rendered services to other courier agencies viz., M/s. Flyer Express, City Courier, Professional International Courier, XPS Courier and received changes from them for picking up parcels from parties and handing over such parcels to such other courier agencies.

The Revenue classified the service rendered by the appellant for the period 1-5-2006 to 22-8-2007 as "Business Support Service" and called upon them to pay the service tax for the said period. Based on the same, the Revenue issued show cause notice on the appellant. The Adjudicating Authority confirmed the demand of Rs. 59,20,783/- along with interest and penalties. Challenging the said order, the appellant preferred appeal before the Tribunal.

The Tribunal, by order dated 24-1-2012 allowed the appeal and remanded the matter for de novo consideration on the ground that the appellant has not proved by producing documents to show that they are mere agent of the principal courier and with a view to afford reasonable opportunity to the appellant, the matter was remanded back to the Adjudicating Authority.

The Adjudicating Authority, after considering the materials placed, passed an order dated 27-12-2012 confirming the demand of Rs. 59,20,783/- as service tax for the period 1-5-2006 to 22-8-2007. Challenging the same, the appellant preferred appeal before the Tribunal and sought for stay of the order as well as waiver of pre-deposit.

After considering the submissions made by the appellant, the Tribunal directed the appellant to pre-deposit a sum of Rs. 10 lakhs within eight weeks. Challenging the same, the appellant has preferred the present Civil Miscellaneous Appeal raising the above mentioned substantial questions of law.

Heard Mr. N. Viswanathan, learned counsel appearing for the appellant and Mr. V. Sundareswaran, learned Standing counsel for the Revenue.

It is to be noted that after the matter was remanded for de novo consideration, the appellant despite opportunity being granted, after 11 months after remand, despite reminders by the Adjudicating Authority, they were unable to produce any records except for certificates from M/s. United Business Xpress India Pvt. Ltd and Professional International Couriers Pvt. Ltd., but failed to produce copies of the agreements or terms of arrangement between the parties concerned or copies of the invoices or details of payment of service tax by the principal courier considering the certificates produced from M/s. United Business Xpress India Pvt. Ltd. and Professional International Couriers Pvt. Ltd., the adjudicating authority confirmed the demand.

The learned counsel appearing for the appellant placed reliance on the order passed by the Tribunal in the case of Professional International Courier (P) Ltd. v. CCE, Chennai-II reported in 2013 (31) S.T.R. 561 (Tri.-Chennai) and submitted that the Tribunal in an identical case has granted entire waiver of pre-deposit and submitted that the same relief should be granted to the appellant herein.

In the case of Professional International Courier (P) Ltd. (cited supra), the appellant therein had produced all the documents to substantiate the nature of service rendered by them. Admittedly in spite of opportunity granted to the appellant herein, no document was produced except for letter/certificate. The Tribunal, while considering the letter dated 29-10-2012 and 1-11-2012 pointed out that the amounts said to be paid by the appellant as per the said letter was far short of the disputed value of service tax. Further it is seen that certain fresh documents were produced before the Tribunal. The Tribunal rightly rejected the plea of the appellant to look into those documents at interim stage as they could be looked into only at the time when the appeal is finally heard. In such circumstances, we do not find any error in the order of the Tribunal. Accordingly, the order of the Tribunal is confirmed. Time to comply with the direction issued by the Tribunal is extended up to 30-4-2014. In the result, the Civil Miscellaneous Appeal is dismissed. No costs. Consequently, connected MP is closed.