Tribunal overturns service tax demand for co-loader, upholds post-2007, penalty overturned.

The Tribunal set aside the demand for service tax as a co-loader for the period from 01.05.2006 to 22.08.2007 based on previous rulings and a Board Circular. However, the demand for the period post 22.08.2007 was upheld with interest, and the case was remanded for further proceedings. The penalty imposed on the appellant was overturned due to no deliberate evasion of service tax payment.

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Issues involved:
1. Challenge to Order-in-Original No. 07/2012 dated 22.02.2012 passed by the Commissioner of Central Excise, Chennai-II Commissionerate regarding service tax liability for the period from 01.05.2006 to 31.03.2009.

Detailed Analysis:

Issue 1: Liability for service tax as a co-loader for the period in dispute (01.05.2006 to 22.08.2007):
The appellant, engaged in providing Courier Agency Service, contested the demand of service tax for services provided as a co-loader under the category 'Business Support Service'. The appellant relied on a CESTAT decision and a Board Circular to support their case. The Tribunal referred to a previous decision where it was held that co-loaders are not liable to pay service tax as they do not provide services directly to the customer but to the courier agency. The Tribunal reiterated that the charges of co-loaders are ultimately recovered by the courier agency from the customer. Thus, the demand for service tax as a co-loader for the period in question was set aside based on the previous ruling and the Circular's clarification.

Issue 2: Liability for service tax for the period post 22.08.2007:
The appellant did not contest the demand for services provided as a co-loader for the period post 22.08.2007. The Tribunal upheld this demand with interest. The case was remanded to the adjudicating authority to calculate the demand for this period. The appellant was given the opportunity to prove payment of tax for this period. The penalty imposed on the appellant was set aside due to no suppression of facts to evade service tax payment.

Conclusion:
The Tribunal set aside the demand for service tax as a co-loader for the period from 01.05.2006 to 22.08.2007 based on previous rulings and a Board Circular. However, the demand for the period post 22.08.2007 was upheld with interest, and the case was remanded for further proceedings. The penalty imposed on the appellant was overturned due to no deliberate evasion of service tax payment.

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