Can Servcie tax & Central excise both be levied at the same time

[RAJESH SANGHVI]

A company is in  the business of designing , producing and installation of signages ( sign board & indicators as in Malls etc ) specifically designed for customers. Material ( like vinyl, adhesives etc)  is purchased by the Company and the signages are made from the machines of the company. Currently the company is charging ST under the composition scheme ( on 70 percent ST at the rate of 12.36 percent ) and VAT as normal. The sales of this company is more than 1.50 crs and no SSI registration is taken.   The question is that is Central Excise applicable though ST is being charged and can Excise and ST both be charged on such transactions.

[Mritunjay Kumar]

Service tax and Excise duty can not be charged simultaneously on the same process. If service tax and been paid by the assessee and no objection has been raised by the department, then on that process excise duty can not be charged. You can refer the case law: Osnar Chemical Pvt. Ltd. Vs. C.C.E., Bangalore (2008 (9) TMI 344 - CESTAT, BANGLORE)[2009(240)E.L.T. 115 (Tri- Bangalore). The judgment passed by Hon'ble Tribunal has been affirmed by Hon'ble Supreme Court of India.

[RAJESH SANGHVI]

That was absolutely informative and amazing. Thank you sir !!

AI Summary

Concurrent taxation prohibition: service tax payment bars subsequent central excise on the same manufacturing process. Service tax and central excise cannot be levied simultaneously on the same process; where service tax has been charged and paid or accepted without objection for that process, excise duty cannot subsequently be imposed. Applied to a company designing, producing and installing signages that pays service tax under a composition scheme, prior payment/acceptance of service tax on the process operates to bar a concurrent central excise levy.