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of <h1>Tribunal sets aside service tax demand for GTA transport on allegedly removed goods, questions validity of show cause notice</h1> <h3>M/s. Tajmahal Tobacco Company Pvt Ltd Versus CCE, Trichy</h3> M/s. Tajmahal Tobacco Company Pvt Ltd Versus CCE, Trichy - 2016 (43) S.T.R. 93 (Tri. - Chennai) Issues:Demand of service tax on GTA outward transport service under reverse charge.Analysis:The case involved a dispute regarding the demand of service tax on GTA outward transport service under reverse charge. The Department issued a show cause notice demanding service tax on the alleged clandestine removal of finished goods. The adjudicating authority confirmed the demand, which was upheld by the Commissioner (Appeals), leading to the present appeal.The appellant, a manufacturer of chewing tobacco, argued that a previous show cause notice by DGCEI for clandestine removal of goods had been settled by the Hon'ble Settlement Commission. They contended that the subsequent show cause notice for service tax lacked basis and details, with no evidence provided on how the service tax amount was quantified. The appellant also highlighted that for certain periods, no GTA outward charges were incurred as transportation was arranged by the buyer from the factory gate.On the contrary, the Department argued that the demand was calculated on an average basis and cited a Supreme Court judgment to support their position. However, the Tribunal noted that the previous settlement of the excise duty demand by the Settlement Commission for the same goods and period raised questions about the validity of the current show cause notice for service tax.The Tribunal found that the demand for service tax on GTA outward transport for allegedly clandestinely removed goods was unsustainable and lacked merit. It emphasized that the previous settlement of the offence case by the Settlement Commission should prevent the Department from issuing a new show cause notice on different grounds for the same goods and period. Therefore, the impugned order was set aside, and the appeal was allowed. The Tribunal also disposed of the stay application in the matter.
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