2014 (2) TMI 100 - AT - Service Tax

Appellate Tribunal rules against double taxation in service tax appeal

UMASONS AUTO COMPO PVT LTD Versus COMMISSIONER OF CENTRAL EXCISE & CUSTOMS

The Appellate Tribunal CESTAT MUMBAI ruled in favor of the appellant in an appeal against the demand of service tax on the recipient of Goods Transport ... Demand of service tax - Recipient of GTA service - Appellant had paid the service tax to the provider of GTA service and the provider has paid to the Revenue and the appellant has availed credit of the same - Held that:- there is no dispute regarding payment of service tax by the provider of GTA service. Once the amount of service tax is accepted by the Revenue from the provider of GTA service, it cannot be again demanded from the recipient of the GTA service - Decided in favour of assessee. Issues:- Appeal against demand of service tax on recipient of GTA service- Contention of appellant regarding payment of service tax by provider- Interpretation of provisions of Finance Act regarding liability to pay service tax- Application of precedent in Navyug Alloys Pvt. Ltd caseAnalysis:The judgment by Appellate Tribunal CESTAT MUMBAI dealt with an appeal against the demand of service tax on the recipient of Goods Transport Agency (GTA) service. The impugned order confirmed the demand of service tax on the appellant as the recipient of the service. The appellant argued that they had already paid the service tax to the provider of GTA service, who had in turn paid it to the Revenue, and the appellant had availed credit for the same. The appellant contended that since the service tax had already been paid by the provider, it was not sustainable for the Revenue to demand the same tax from the recipient. The appellant also cited the decision of the Tribunal in the case of Navyug Alloys Pvt. Ltd vs CCE & C, Vadodara II in support of their argument.The Revenue, on the other hand, relied on the lower authorities' findings and contended that as per the provisions of the Finance Act, the recipient is liable to pay service tax for GTA service. The Revenue argued that if the service tax had been paid by the service provider, the recipient could seek a refund of the amount. The Tribunal analyzed the situation and noted that there was no dispute regarding the payment of service tax by the provider of GTA service. Once the Revenue had accepted the service tax amount from the provider, it could not be demanded again from the recipient of the service. Therefore, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.In conclusion, the judgment clarified the liability to pay service tax for GTA service as per the provisions of the Finance Act and emphasized that if the tax had already been paid by the service provider and accepted by the Revenue, it could not be demanded again from the recipient. The Tribunal's decision was based on the principle of avoiding double taxation and ensuring that the tax liability was appropriately discharged by the party responsible for it.