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V2(ST)46/A-IV/2012

ORDER-IN-APPEAL

M/s Interface Brokerage and Research Ltd., having theiroffice located at 1101, AtlantaTower, Off. C.G. Road, Gulbai Tekra, Ahmedabad 380 006 (hereinafter referred to as “the appellants”) havefiled an appeal along with stay application on 27.01.2012against Order-in-Original No. STC/117/DC/Div.-III/09-10 dated 29.03.2010 (hereinafter referred to as “the impugned order”) passed by theDeputyCommissioner,Service Tax, Division III, Ahmedabad(hereinafter referred to as “the adjudicating authority”).

2.The facts of the case, in brief, are that the appellants are engaged in providing service under the category of ‘Stock BrokerServices’as defined under Section 65 of the Finance Act, 1994 (hereinafter referred to as “the Act”) and hold Service Tax Registrations No. AAACI3615AST001. During the course of audit, on comparison of values as per P&L A/c and ST-3 returns, it was observed that the appellant had short paid service tax on the brokerage income received by them during F.Y. 2004-2005. It was noticed that they had shown less income to the extent of `23,83,383 in the ST-3 returns and paid less service tax to the extent of `2,43,105/-during the relevant period.

3.In view of the non payment of service tax, a SCNwas issued to the appellants for demand of service tax amounting to `2,43,105/- under Section 73(1) of the Act alongwith interest under Section 75 and penalties under Section 76 and 78 of the Act. The said SCN was adjudicated by the adjudicating authority vide the impugned order. The adjudicating authority confirmed the demand of service tax of `2,43,105/- under Section 73(1) of the Act holding the said value as part of their taxable service and ordered to pay interest thereon under Section 75 of the Act. He also imposed penalties under Section 76 and Section 78 of the Act.

4.Being aggrieved with the impugned order, the appellants preferred the present appeal alongwith stay application on 27.01.202. The appellants mainly contended that:

i)audit has wrongly considered certain income which was part of their other income in the form of other charges on F&O, Primary Market Brokerage etc. as taxable income. They stated that service tax is not imposable on charges such as stock brokerage services through stock exchange, depository services, primary market brokerage and other charges on F&O as these charges are reimbursable in nature;

ii)adjudicating authority has wrongly calculated service tax at a flat rate of 10.20% on the differential amount without considering the change in rate of service tax to 8% from 10.20 % during the relevant period;

iii) they had shifted their office on 16.01.2009 to a new address and they had not received any communication for personal hearing from the adjudicating authority.

The appellants had also filed a request vide letter date 24.01.2012 for condonation of delay in submission of the appeal, in which they had stated that the impugned OIO was not served at their new address and it was received by them only on 26.11.2011.

5.Personal hearing was held in the case on 22.02.2012, wherein Shri Kamlesh Solanki, Authorized Representative, appeared on behalf of the appellantsand re-iterated the points stated in the grounds of appeal. Hefurther stated that the clarification of Board vide letter F.No.187/107/2010-CX.4 dated 17.09.2010 was not available to the disputed period,hence, there is no liability of service tax for the period prior to it. However they reiterated that the issue may be decided on merits and requested to set aside the impugned OIO.

DISCUSSION AND FINDINGS

6.I have carefully gone through the facts of the case on records, grounds of appeal in the Appeal Memorandum, Stay application and oral submissions made by the appellants at the time of personal hearing.

7.Before going into the merit of the case, I would like to examine whether the appeal has been filed within the time limit prescribed under Section 85 of the Finance Act,1994. I find that the impugned order was passed on 29.03.2010 but the appellants have filed the present appeal on 27.01.2012, i.e. after a period of more than 21months. Section 37C of the Central Excise Act,1944 made applicable to Service Tax matters vide Section 83 of the Finance act,1994 prescribe the method of service of order by the department. The provision of Section 37C is produced below:-

”SECTION 37C.Service of decisions, orders, summons, etc. — (1) Any decision or order passed or any summons or notices issued under this Act or the rules made there under, shall be served, -

a)by tendering the decision, order, summons or notice, or sending it by registered post with acknowledgment due, to the person for whom it is intended or his authorised agent, if any;

b)if the decision, order, summons or notice cannot be served in the manner provided in clause (a), by affixing a copy thereof to some conspicuous part of the factory or warehouse or other place of business or usual place of residence of the person for whom such decision, order, summons or notice, as the case may be, is intended;

c)if the decision, order, summons or notice cannot be served in the manner provided in clauses (a) and (b), by affixing a copy thereof on the notice board of the officer or authority who or which passed such decision or order or issued such summons or notice.

(2) Every decision or order passed or any summons or notice issued under this Act or the rules made thereunder, shall be deemed to have been served on the date on which the decision, order, summons or notice is tendered or delivered by post or a copy thereof is affixed in the manner provided in sub-section (1).”

As per the Section cited above, if the order is served by Registered Post with Acknowledgement, it amounts to service of order to the party concerned. In order to ascertain the actual date of service of the OIO, a letter F.No.V2(ST)46/A-IV/2012 dated 30.01.2012 was issued to Assistant Commissioner, Service Tax, Div.III, Ahmedabad seeking the exact date of delivery of the OIO. In reply, Assistant Commissioner, vide letter F.No.STC/286/Dem/IBR/Div-III/07-08 dated 07.02.2012 has reported that the OIO was dispatched on 30.03.2010 by Registered Post with acknowledgement. Hence, as per Section 37C cited above, 30.03.2010 can be taken as the date of service of the OIO to the appellant.

8.The appellant had shown the date of receipt of the impugned OIO as 26.11..2011 in FORM-ST-4, but without any documentary evidence.The appellant has filed the appeal on 27.01.2012,i.e. after more than 21 months from the dateofserving of the impugned order. As per the proviso to section 85 (3) of the Finance Act,1994, Commissioner (Appeals), on being satisfied that the appellant was prevented by sufficient cause from presenting the appeal within three months,can allow the appellant a further period of three months over and above the three months from the date of receipt of the order, to file the appeal. Thus, in the normal course, an appeal has to be filed before the Commissioner (A) within 3 months of receipt of the OIO. On sufficient reason for the delay, the Commissioner (A) can condone the delay and extend further the period of 3 months to file the appeal. In the present case, the delay in filing of appeal by the appellant exceeds the stipulated period of three months and the maximum period that can be extended by the Commissioner (A). Thus it is beyond the scope of condonation permissible under the proviso to section 85 (3) of the Finance Act,1994.

9.The contention of the appellant that they had shifted their office on 16.01.2009 to a new address and they had not received any communication for personal hearing from the adjudicating authority is not acceptable as it was the obligation on their part to inform about their new address to the adjudicating authority. I find that the appellant had not produced any evidence that they had informed about their new address to the adjudicating authority I, therefore, find that the appeal filed by the appellant is liable for rejection on the grounds of limitation. Since the appeal filed is liable for rejection on the grounds of limitation, I am not going into the merits of the appeal.

ORDER

10.In view of the above findings, I reject the appeal filed by the appellants as time barred.The stay application of the appellants is also disposed off accordingly.

Sd/- (16.04.2012)

(K. ANPAZHAKAN)

COMMISSIONER (APPEAL-IV)

CENTRAL EXCISE, AHMEDABAD.

Date .04.2012

ATTESTED

(H.K.JAIN)

SUPERINTENDENT (APPEAL-IV)

CENTRAL EXCISE, AHMEDABAD.

To, (By R.P.A.D)

M/s Interface Brokerage and Research Ltd.,

1101, Atlanta Tower, Off. C.G. Road,

Gulbai Tekra, Ahmedabad 380 006.

COPY TO:-

  1. The Chief Commissioner, Central Excise, Ahmedabad Zone, Ahmedabad.
  2. The Commissioner, Service Tax, Ahmedabad.
  3. The Assistant Commissioner, Service Tax, Division-III, Ahmedabad.
  4. The Assistant Commissioner, (Systems), Service Tax, Ahmedabad.
  5. Guard file.
  6. P.A. file.