Double taxation barred where service tax was already paid by the actual provider and reimbursement invoices were retrospectively reversed.

Service tax could not be demanded on SBM hiring, CHA, loading and GMB shipping charges where the actual service provider had already discharged tax and the appellant only raised reimbursement invoices later reversed under a retrospective contractual amendment. The Tribunal found that the appellant was not the service provider for the relevant activity, the same service could not be taxed again, and the amendment eliminated any surviving consideration. On that basis, the demand was unsustainable and the consequential penalty challenge also failed.

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Issues: Whether service tax could be demanded from the appellant on SBM hiring charges, CHA charges, loading charges and GMB shipping fee when the actual service provider had already discharged tax and the invoices raised by the appellant were later reversed pursuant to a retrospective contractual amendment, leaving no consideration.

Analysis: The charges related to use of Reliance SBM for transportation of naphtha to the OPAL SEZ unit. The facts found by the Tribunal showed that the actual service was provided by Reliance, which had already collected and remitted service tax on the charges. The appellant had merely raised invoices for reimbursement of the amount paid, and those invoices were subsequently reversed when the contract with OPAL was amended retrospectively. In that situation, the appellant was not the service provider for the relevant activity, the same service could not be taxed again, and absence of consideration after retrospective amendment negated the levy.

Conclusion: The service tax demand was not sustainable and was rightly set aside in favour of the assessee.

Final Conclusion: The demand was annulled and the connected revenue challenge to the consequential penalty did not survive.

Ratio Decidendi: Where the actual service provider has already discharged service tax and the alleged recipient of reimbursement has no surviving consideration due to a retrospective contractual amendment, a further service tax demand on the same transaction is impermissible.

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