2023 (6) TMI 703 - AT - Service Tax

Appeal dismissed, service tax liability confirmed. Appellant's arguments lacked merit.

M/s. U.B. Xpress (South) Private Limited Versus The Commissioner of Service Tax, Chennai

M/s. U.B. Xpress (South) Private Limited Versus The Commissioner of Service Tax, Chennai - TMI Issues Involved:1. Classification of Services: Whether the services rendered by the appellant are that of a co-loader/courier agency or classified under 'support services of business or commerce.'2. Principal Courier's Tax Discharge: Whether the principal couriers discharged the Service Tax on the portion sub-contracted to the appellant.3. Export of Service: Whether the services rendered by the appellant could be treated as export of service.4. Extended Period of Limitation: Whether it is justified to invoke the extended period of limitation.Summary:1. Classification of Services:The Tribunal examined whether the appellant's services fall under 'courier agency' or 'support services of business or commerce.' The appellant contended that their services were those of a co-loader, relying on the Board Circular F. No.341/43/96-TRU dated 31.10.1996, which stated that co-loaders are not liable for Service Tax if the principal courier has discharged the tax. However, the adjudicating authority concluded that the services rendered were not classifiable under co-loader service but under business support service, relying on the Board's clarification dated 12.12.2007. The Tribunal upheld this classification due to lack of substantial evidence from the appellant to prove otherwise.2. Principal Courier's Tax Discharge:The appellant initially claimed that the principal courier had paid the Service Tax, but later argued that the services amounted to export of service. The adjudicating authority found no evidence supporting the appellant's claim that the principal courier had discharged the Service Tax liability. The Tribunal confirmed that the appellant failed to produce any contract or agreement to substantiate their claim.3. Export of Service:The appellant claimed that the services were exported and thus not liable for Service Tax. However, the adjudicating authority found that the services were rendered to recipients located in India and payments were received in Indian Rupees, not in foreign currency, as required by the Export of Service Rules, 2005. The Tribunal agreed, noting the absence of Foreign Inward Remittance Certificates (FIRC) to support the claim of export of services.4. Extended Period of Limitation:The adjudicating authority invoked the extended period of limitation, citing suppression of facts with intent to evade tax. The appellant argued that they relied on the 1996 Board Circular, which was in force until 22.08.2007, and thus had no intention to evade tax. However, the Tribunal found that the appellant failed to disclose the disputed income in its ST-3 returns and did not produce any evidence of correspondence with the Department regarding the taxability of the income. The Tribunal upheld the invocation of the extended period of limitation.Conclusion:The Tribunal dismissed the appeal, confirming the classification of services under business support service, the liability to pay Service Tax, and the invocation of the extended period of limitation. The appellant's arguments were found lacking in merit and evidence.