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Jagdish Oil Mills v/s Commissioner of Central Excise, Aurangabad

Company & Directors' Information:- N K OIL MILLS PVT LTD [Active] CIN = U15201GJ1994PTC022669

Company & Directors' Information:- B P OIL MILLS LIMITED [Active] CIN = U15142UP1965PLC003232

Company & Directors' Information:- K P L OIL MILLS PRIVATE LIMITED [Active] CIN = U15142KL1983PTC003685

Company & Directors' Information:- N K B OIL MILLS PRIVATE LIMITED [Active] CIN = U15142KL1999PTC013095

Company & Directors' Information:- K K K OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15142KL2000PTC013621

Company & Directors' Information:- S N OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15142HR1986PTC025702

Company & Directors' Information:- G. B. OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15326HR1985PTC019817

Company & Directors' Information:- R. OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15141DL1992PTC047883

Company & Directors' Information:- J K OIL MILLS COMPANY LIMITED [Strike Off] CIN = U15143UP1955PLC002570

Company & Directors' Information:- N N OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15147MH1999PTC117989

Company & Directors' Information:- THE AURANGABAD MILLS LIMITED [Active] CIN = U99999MH1903PLC000185

Company & Directors' Information:- J & T OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15141KL2006PTC019754

Company & Directors' Information:- A AND R OIL MILLS PVT LTD [Strike Off] CIN = U15315CH1994PTC014265

Company & Directors' Information:- JAGDISH MILLS LIMITED [Dissolved] CIN = U99999MH1936PTC002521

    APPEAL NO.ST/110 of 2009

    Decided On, 10 February 2010

    At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Mumbai


    Shri D.R. Gadekar, Consultant, for Appellants. Shri N.A. Sayyad, JDR, Authorized Representative.

Judgment Text

Per : Ashok Jindal, Member (Judicial)

The appeal is against the revisional order confirming the penalties on the appellant under Section 76,77 & 78 of the Finance Act, 1994.

2. The facts of the case are that the appellant is engaged in the manufacture of Refined Cotton Oil inputs i.e. raw material Cotton Waste Oil is used and after procession on inputs finished goods refined cotton oil is coming into existence which is sold in market. The inputs were received from various customers by the appellant for refining and after receipt of the said inputs the same are to be processed are accounted in the Daily stock Account Register and cleared from the factory on payment of duty as applicable rates. During the course of investigation, the preventive officers concluding the activity of refining as job work and asked the appellant to pay service tax under the category of Business Auxiliary Services. The appellant to get rid of litigation deposited the Service Tax as demanded by the department and paid the penalty of Rs.10,000/- also. The assessment was completed but the Commissioner under the powers under Section 84 of the Finance Act, 1994 revised the assessment and hold that the appellant has willfully suppressed the fact from the department regarding the activities of business auxiliary service with intent to evade service tax due thereon and confirmed the various penalties under Section 76,77 &78 of the Finance Act. The appellant pleaded before the revisional authority that their activity amounts to manufacture and they have paid excess duty on the refined oil and as such they were no required to service tax, accordingly they are not liable to pay any penalty. But the adjudicating authority did not consider the same and imposed the various penalties on the appellants. Aggrieved from the same appellant is before me.

3. The learned Advocate for the appellant submits that they are not covered under BAs as the activity taken by them is manufacture but they paid service tax demand they do not want to go on litigation, He also submitted that otherwise the appellant is paying Central Excise duty on their activities being the manufacturing activity and sane has been accepted by the department. The same is brought in the knowledge of the adjudicating authority while considering the penalty aspect but the revisional authority instead of considering the same held that the appellant has intently evaded the payment of service tax.

4. On the other hand, the Learned DR submitted that the order of levy of service tax has become final and same has not been challenged. Hence the appellant cannot agitate the merits in the penalty proceedings. He placed reliance on Collector of Central Excise, Kanpur Vs. Flock (India) Pvt. Ltd. 2000 (120) E.L.T. 285 (S.C.)] wherein it was held that when a adjudicating authority has passed an order which is appealable under the statute and the party aggrieved did not choose to exercise the statutory right of filing an appeal it is not open to the party to the question of correctness of order of the adjudicating authority subsequently by filing a claim for refund.

5. Heard both sides.

6. After giving a careful consideration of the submissions made before me. The reliance placed by the DR is totally irrelevant in the facts and circumstances of the case as there was a case of refund in consequent of the adjudication order and it is a case of levy of penalty. While confirming the penalty, the adjudicating authority has to go into the merits to establish suppression of the material facts with an intention to evade the payment of service tax. In this case, the appellant has not asking for any consequential relief in pursuing to the adjudication order but wants to consider the merits for levy of penalties. Hence the reliance placed by the DR is not acceptable. The submissions made by the Advocate have convincing force. Moreover although the appellant has not challenged the adjudication order but in the penalty proceedings the appellant has right to prove his bonafide that the appellant has not intention to evade any service tax.

7. The learned Advocate?s submission tha

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t the Commissioner did not give them the benefit of Section 80 of the Finance Act, while deciding the case. In these circumstances, where the appellant has paid the Central Excise duty on the manufacturing activity taken over by them it cannot be termed that there was any intention of the appellant to evade any payment of service tax. 8. With these observations, I do not find any merit in the impugned order, same is set aside and the appeal is allowed.