2017 (8) TMI 1625 - AT - Service Tax

Tribunal Confirms No Service Tax on Coal Crushing; Sales Tax Already Paid; Aligns with Supreme Court's Decision.

The Tribunal dismissed the department's appeal, affirming that crushing/sizing of coal by the appellant does not attract service tax under business ... Levy of service tax - Business Auxiliary Service - crushing/sizing of the coal by the respondents for sale - period of dispute is 01.04.2007 to 28.02.2011 - HELD THAT:- The appellants had paid the sales tax/vat and total amount of sale includes crushing charges as well as other charges e.g. silo loading charges and the same was shown in the profit and loss account - The Hon’ble Supreme Court in the case of Bharat Sanchar Nigam Ltd. Vs. UOI[2006 (3) TMI 1 - SUPREME COURT] observed that sales tax and service tax cannot be made applicable on the same transaction as the same is includible to each other. In the instant case undisputedly, the appellant has paid the sales tax/vat, when it is so then crushing charges are not leviable. Regarding the payment of sales tax/vat, the Ld. Counsel for the appellant has shown proof to the Ld. Counsel for the Department - Appeal dismissed - decided against Revenue. Issues:- Whether crushing/sizing of coal by the appellant for sale attracts service tax under business auxiliary serviceRs.- Whether the payment of sales tax/vat by the appellant affects the levy of crushing charges under service taxRs.Analysis:1. The appeal was filed against the Order-in-Original dated 06/02/2014 concerning the period from 01.04.2007 to 28.02.2011. The appellant was involved in crushing/sizing coal in its mines, and the department contended that this activity attracts service tax under business auxiliary service. However, the Commissioner dropped the demand, leading to the department's appeal.2. The case revolved around whether the crushing charges were leviable for service tax considering the appellant had already paid sales tax/vat. The Hon'ble Supreme Court precedent highlighted that sales tax and service tax cannot be imposed on the same transaction. The appellant demonstrated proof of sales tax/vat payment, indicating that crushing charges should not be applicable.3. Following the Supreme Court's precedent, the Tribunal found no justification to uphold the impugned order. As the appellant had paid sales tax/vat and crushing charges were part of the total sale amount, the Tribunal dismissed the department's appeal. This decision was based on the principle that sales tax and service tax are mutually exclusive on the same transaction.4. The judgment emphasized the importance of adhering to legal principles and established precedents, leading to the dismissal of the department's appeal. The clarity provided by the Supreme Court's ruling guided the Tribunal's decision, ensuring consistency and fairness in tax imposition.