2011 (6) TMI 366 - AT - Service Tax

Goods Transport Service by Air - Demand for the period April 2006 to June 2008 from the appellant in the capacity as recipient of service - Invoice has been raised by Indian company and it has also charged service tax on the appellant and therefore the burden of discharging tax falls on the service provider under Section 66(A) of the Finance Act, 1994 - Held that - At this stage as both sides submit that the original adjudicating authority can verify the relevant invoice once again to see whether service was provided by an Indian company as emerging from the invoice and if so, it can be verified that the Indian company had paid the tax or not - The impugned order is set aside and the matter is remanded to the original adjudicating authority.

Issues:
1. Demand of service tax on 'Goods Transport Service by Air' from the appellant for the period April 2006 to June 2008.
2. Applicability of Section 66(A) of the Finance Act, 1994 in the case.
3. Identification of the service provider as an Indian company or a foreign service provider.
4. Burden of discharging tax under Section 66(A) of the Finance Act, 1994.
5. Verification of documentary evidence by the original adjudicating authority.
6. Decision on pre-deposit requirement and remand of the matter to the original adjudicating authority.

Analysis:
1. The case involved a demand of service tax on 'Goods Transport Service by Air' from the appellant for the period April 2006 to June 2008. The lower authorities concluded that the service was received from a foreign service provider, rejecting the appellant's claim that the service provider was an agent of the foreign service provider, hence Section 66(A) of the Finance Act, 1994 was not applicable.

2. The appellant submitted an invoice copy showing that an Indian company, M/s Schenker India Pvt. Ltd., issued the invoice for the service and charged service tax separately. However, it was noted that the company registered as a service provider in the year 2006. The appellant failed to prove that M/s Schenker India Pvt. Ltd. was an agent of the foreign service provider, leading to the confirmation of the demand.

3. The Tribunal observed that the burden of discharging tax falls on the service provider under Section 66(A) of the Finance Act, 1994, as the invoice was raised by an Indian company. The matter was remanded to the original adjudicating authority for verification of whether the Indian company had paid the tax, and if not, to quantify the exact tax liability for further adjudication.

4. The decision was made to waive the pre-deposit requirement and remand the matter to the original adjudicating authority for verifying the documentary evidence to arrive at a correct conclusion. The stay petition and appeal were disposed of, setting aside the impugned order and emphasizing the appellant's cooperation for a speedy adjudication of the issue.

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