2011 (9) TMI 333 - AT - Service Tax

Service Tax - G.T.A. Service - Appellant contended that corporate office registered themselves as an input service distributor and the transporters while raising the invoices had raised it on corporate office but the goods were sent to the factory Corporate office paid the Service Tax - amount to taxing the same service twice - hence decided that Appellants should be given another opportunity to produce evidence and prove to the original adjudicating authority that the services in respect of which demand has been confirmed now had actually suffered Service Tax and paid by the corporate office - Stay Petition and remand the matter to the original adjudicating authority for fresh adjudication - Decided against the favour of appellant.

Summary

Issues:
1. Demand of Service Tax on inward transportation of goods
2. Applicability of Service Tax paid by corporate office for the same service
3. Failure to understand and implement the law by the company
4. Need for verification of Service Tax payment by the corporate office
5. Opportunity for the appellant to produce evidence for fresh adjudication

Analysis:
The Appellate Tribunal addressed the issue of a Service Tax demand of approximately Rs.10.50 Crores on the Appellant for the period from January 2005 to March 2008 concerning the G.T.A. Service received for inward transportation of goods. The Appellant argued that the corporate office, registered as an input service distributor, had paid the Service Tax for the transport services, and the demand on the factory would result in double taxation of the same service. The Appellant requested a Stay Petition, emphasizing that the entire Service Tax amount had been paid, and the original adjudicating Authority had not verified the payment by the corporate office. The Tribunal acknowledged the failure of the Appellant, a large company, to understand and implement the law correctly. However, it highlighted the necessity to verify the claim that the Service Tax had indeed been paid by the corporate office for the same service in question. The Tribunal noted a Circular issued by the Board in 2004, stating that if Service Tax was paid by the service provider, the service receiver should not be required to pay it again, emphasizing that the same service cannot be taxed twice. Consequently, the Tribunal allowed the Stay Petition, remanding the matter to the original adjudicating authority for fresh adjudication. The Tribunal instructed the Appellants to provide evidence of Service Tax payment for the confirmed demand services and present all defenses, without expressing any opinion on the case's merits. The Stay Petition and Appeal were disposed of, granting the Appellants an opportunity to present necessary evidence for a fair adjudication process.