Page 148 - GSTL_2nd July 2020 _Vol 38_Part 1

66 GST LAW TIMES [ Vol. 38
the Revenue against the Order-in-Original LUD-EXCUS-000-COM-072-14-15,
dated 28-2-2014 passed by the Commissioner of Central Excise, Ludhiana, by
which the Commissioner has dropped the demand raised against the respondent
vide Show Cause Notice dated 3-9-2013.
2. Brief facts of the case are that the respondent is registered with the
Service Tax Department vide Registration No. AABCC4307JST001, for providing
the services under the category of Customs House Agent “CHA” under the pro-
visions of Finance Act, 1994 (hereinafter referred to as ‘Act’). It appeared to the
Revenue that the respondent have contravened the provisions of Section 67 of
the Act, as amended, and Rules made thereunder and made payment of service
tax only on a portion of gross amount received for providing the taxable service.
The service tax amounting to Rs. 64,55,953 (Rs. Sixty Four Lakhs Fifty Five Thou-
sand Nine Hundred and Fifty Three only) were alleged to be evaded. The show
cause notice was thus issued for recovery of the said amount under the provi-
sions of Section 73 of the Act along with interest under Section 75 of the Act.
Penalties were also proposed against the respondent under Sections 77 and 78 of
the Act.
3. The show cause notice was issued on the investigation being con-
ducted by the Directorate General of Central Excise Intelligence (DGCEI), on the
basis of a intelligence that the respondent were charging amount to Rs. 1,500/- to
Rs. 2,000/- per container towards the Services Charge, however, the Service Tax
was being discharged only on the value of Rs. 300/- per container only. During
the search of the premises of the respondent, it was revealed that the premises of
respondent was being shared by the M/s. Deep Handling Services, Ludhiana
(for short ‘Deep’), who was providing CHA services under license of M/s. Pooja
Travels and Cargo Services, Chittaranjan Park, Kalkaji, New Delhi, (for short
‘Pooja’) to various clients of the respondent. For providing CHA services, Deep
was being paid Rs. 200 per container by the respondent as the service charge but
the respondent was raising invoices to their clients for Rs. 300 per container. It
was also discovered that Deep was also raising debit notes for various expenses,
such as documentation expenses, crane handling charges, labour charges,
weighment expenses, miscellaneous expenses etc., to the respondent and the re-
spondent in turn was raising debit notes to their clients for said expenses and
thus the respondent was required to pay the Service Tax on the amount received
through same debit note, in view of provisions of Section 65(105)(h) of the Act
read with Section 65(35) of Finance Act. After investigation and recordings of the
statements, the show cause notice dated 3-9-2013 was issued to the respondent
which culminated into the impugned order.
4. The Department is aggrieved by the impugned order the adjudicat-
ing authority has dropped the entire demand on the ground contained in the or-
der, which is on account of the fact that the respondent is not covered under the
definition of Customs House Agent under Section 65(35) of the Act, and there-
fore, whatever has been recovered by the respondent is nothing but as charge
collected as the ‘pure agent’ to their client. It was also held in order that the re-
spondent was fulfilling all the conditions prescribed for the pure agent in terms
of Rule 5(2) of Service Tax (Determination of Value) Rules, 2006. The Department
has filed appeal against the impugned order on the ground that the adjudicating
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