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Birla Ready Mix v. Cce
Factual and Procedural Background
The appellants manufacture sugar. During an audit, it was found that they paid for transporting sugarcane from collection centres to their mill, following which the adjudicating authority confirmed a service-tax demand under Goods Transport Agency Service. The Commissioner (Appeals) upheld that order. [1]
Legal Issues Presented
- Whether the appellants’ payment to truckers on behalf of cane farmers attracted Notification No. 35/2004-CE dated 03.12.2004. [2]
- Whether the transporters issued goods receipts (GRs), and what effect that fact had on the service-tax liability. [2][3]
Arguments of the Parties
Appellants' Arguments
- The mere payment to truckers on behalf of cane farmers did not fall within the scope of Notification No. 35/2004-CE. [2]
- The truckers had not issued GRs, although this factual assertion required verification by the lower authorities. [2]
- The appellants relied on the decisions listed below. [2]
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| M/s.Kishan Sahakari Chini Mills Ltd. vs. CCE, Lucknow (Final Order No.51810-51814/2014-ST(DB) dated 29.4.2014) | Relied upon by the appellants in support of their contention. | The matter was remanded for fresh consideration along with the case law relied upon by the appellants. [2][3] |
| Nandganj Sihori Sugar Co.Ltd. vs.CCE. Lucknow-2014 (34) STR 850 (Tri.-Del.) | Relied upon by the appellants in support of their contention. | The matter was remanded for fresh consideration along with the case law relied upon by the appellants. [2][3] |
| Birla Ready Mix vs. CCE, Noida-2013 (30) STR 99 (Tri.-Del.) | Relied upon by the appellants in support of their contention. | The matter was remanded for fresh consideration along with the case law relied upon by the appellants. [2][3] |
| CCE, Guntur vs.Kanaka Durga Agro Oil Products Pvt.Ltd.-2009 (15) STR 399 (Tri.-Bang.) | Relied upon by the appellants in support of their contention. | The matter was remanded for fresh consideration along with the case law relied upon by the appellants. [2][3] |
Court's Reasoning and Analysis
After considering the parties’ submissions and examining the record, the Court identified a factual dispute concerning the documents used by the transporter, particularly whether GRs had been issued. [3]
Because that factual issue required examination, the Court set aside the impugned order and remanded the matter to the adjudicating authority for a fresh decision after detailed consideration of the facts and the case law relied upon by the appellants. The adjudicating authority was also required to provide the appellants a proper opportunity of hearing. [3]
Holding and Implications
Appeal allowed by way of remand. The impugned order was set aside, and the adjudicating authority must reconsider the matter afresh, including the issue concerning GRs, the relevant facts, and the cited case law, after giving the appellants an opportunity of hearing. [3][4]
The decision does not finally determine the service-tax liability; it directs fresh adjudication. No broader implications or new precedent were stated. [3][4]
PER: P.K.DAS The appellants are engaged in the manufacture of Sugar. During the course of audit by A.G.(Audit) party, it was noticed that the appellant paid amount for transporting of Cane from collection centres to their Mill for manufacturing of the Sugar. The adjudicating authority confirmed the demand of service tax under Goods Transport Agency Service. The Commissioner (Appeals) upheld the adjudication order.
2. The main contention of the Appellant is that the mere payment of Truckers on behalf of the cane farmers would not come within the purview of Notification No.35/2004-CE, dated 03.12.2004. Learned Advocate fairly submits that they have taken a definite stand that the truckers had not issued GRs, which is required to be verified by the lower authorities. He relied upon the decisions of the Tribunal as under: (a) M/s.Kishan Sahakari Chini Mills Ltd. vs. CCE, Lucknow (Final Order No.51810-51814/2014-ST(DB) dated 29.4.2014 (b) Nandganj Sihori Sugar Co.Ltd. vs.CCE. Lucknow-2014 (34) STR 850 (Tri.-Del.) (c) Birla Ready Mix vs. CCE, Noida-2013 (30) STR 99 (Tri.-Del.) (d) CCE, Guntur vs.Kanaka Durga Agro Oil Products Pvt.Ltd.-2009 (15) STR 399 (Tri.-Bang.)
3. After considering the submissions of both sides and on perusal of the records, we find that there is a factual dispute on the documents used by the transporter, issuance of GRs which is required to be examined. In view of that, we set aside the impugned order and the matter is remanded back to the adjudicating authority to decide afresh after considering the facts of the case in detail with the case law as relied upon by the appellant. Needless to say that the adjudicating authority shall give proper opportunity of hearing to the appellant before decision.
4. The appeal filed by the Appellant is allowed by way of remand. (Pronounced in the court) (P.S.PRUTHI) (P.K.DAS) MEMBER (TECHNICAL) MEMBER(JUDICIAL)
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