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MANU/CS/0083/2022

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH, AHMEDABAD

Service Tax Appeal No. 13002 of 2019

Decided On: 11.04.2022

Appellants: J.J. Patel & Brothers Vs. Respondent: C.C.E. & S.T.-Surat-I

Hon'ble Judges/Coram:
Ramesh Nair, Member (J) and Raju

ORDER

Ramesh Nair, Member (J)

1. Brief facts of the case are that an enquiry was conducted against the appellant and on verification of documents, department noticed that assessee are providing 'Business Auxiliary Service" to M/s. Gujarat Gas Co. Ltd. in the form of infrastructural Support by way of providing land, building & equipment's, manpower, electricity connection and selling and billing of CNG gas, collection of bills etc.. They are receiving Service Charges from M/s. Gujarat Gas Co. Ltd. fixed at the rate of per Kg. CNG gas sold in a month subject to a minimum amount of CNG Gas to be sold by them as entered into contract with M/s. Gujarat Gas Co. Ltd. On further verification of Bank Statement & ST-3 returns, it was noticed that there was huge difference in taxable value shown in ST-3 returns and amount of service charge received in Bank account. The Appellants submits the reason of difference that the difference is due to reimbursement of electricity charges. A show cause notice was issued for the period 2011-12 to 2015-16 demanding service tax on reimbursement of electricity expenses. The show cause notice also proposed interest thereon and also to impose penalties. After due process of law, the adjudicating Authority confirmed the demand of Rs. 45,65,552/- along with interest and imposed equal penalty under Section 78 of the Finance Act, 1994. In addition, penalty of Rs. 10,000/- under Section 77 was also imposed. Being aggrieved by such order, appellant filed appeal before Commissioner (Appeals) who vide impugned Order-In-Appeal upheld the same. Hence this Appeal.

2. The learned counsel Shri Akshay Modi appearing on behalf of the appellant submit that appellant is earning commission income under the Franchise Agreement with Gujarat Gas Company Ltd. for Providing infrastructure support service. As per the franchise Agreement, the appellant is acting as pure agent as liability to pay electricity charges for Compressor, dispensers and forecourt lighting to Electricity Company is of CGCL as par para 4.6 of the Franchise Agreement. Both the........