2013 (11) TMI 1734 - AT - Service Tax

Recipient not liable for Service Tax if provider paid; demand post-payment impermissible under Finance Act. Appeal allowed.

Umasons Auto Compo Pvt. Ltd. Versus Commissioner of C. Ex., Aurangabad

Umasons Auto Compo Pvt. Ltd. Versus Commissioner of C. Ex., Aurangabad - 2016 [46] S.T.R. 405 (Tri. - Mumbai) Issues: The issue involved in the judgment is whether the recipient of GTA service is liable to pay Service Tax when the provider of the service has already paid the tax.Summary:Issue 1: Liability of recipient for Service Tax paymentThe appellant filed an appeal against the order confirming the demand of Service Tax on the ground that as the recipient of GTA service, they are liable to pay the tax. The appellant contended that they had already paid the tax to the service provider, who in turn paid it to the Revenue, and the appellant had availed credit for the same. Citing a previous Tribunal decision, the appellant argued that the demand was not sustainable.Issue 2: Interpretation of Finance Act provisionsThe Revenue argued that as per the Finance Act, the recipient is indeed liable to pay Service Tax for GTA service, and if the provider has already paid it, the recipient can seek a refund. However, the Tribunal found that once the Revenue accepted the Service Tax from the service provider, it cannot be demanded again from the recipient. Therefore, the impugned order confirming the demand was set aside, and the appeal was allowed.(Separate Judgment by Judge S.S. Kang)The judgment by Judge S.S. Kang concluded that the demand of Service Tax from the recipient of GTA service was not sustainable when the tax had already been paid by the service provider and accepted by the Revenue. The decision was based on the interpretation of relevant provisions of the Finance Act and previous Tribunal rulings.