2014 (8) TMI 447 - AT - Service Tax

Payment of tax by C&F Agents on outward transportation services - Revenue contends that respondents are the exporter and they are paying service tax on inward goods transportation services but are not paying service tax on outward transportation service - Held that - It is a clear finding in the impugned order by the Commissioner (Appeals) that service tax has been paid by the C&F Agents. In the Show Cause Notice nothing is contrary to that whether C&F Agents has paid service tax or not. It is settled law that service tax to be paid once not twice. If the department has any doubt regarding non-payment of service tax by the C&F Agents, they are free to go and verify the records. The challenge of the Revenue is that service tax is not paid by the respondents and not by the C&F Agents. As in this case, Service tax has been paid by the C&F Agents, the demand of service tax on the respondent is not sustainable - Decided against Revenue.

Summary

Issues:
- Appeal against order regarding service tax on outward transportation services

Analysis:
The appeal was filed by the Revenue against an order where the Commissioner (Appeals) found that service tax had been paid by the C&F Agents on outward transportation services, thus relieving the respondents from paying service tax on the same. The respondents, exporters, had paid service tax on inward goods transportation services but not on outward transportation services. The adjudicating authority had initially demanded service tax on outward transportation, which was confirmed along with interest and penalties. However, the Commissioner (Appeals) overturned this decision after verifying documents provided by the respondents, concluding that the C&F Agents had indeed paid the service tax on outward transportation services.

The Revenue contended that the lower Appellate Authority had only verified the bill of C&F Agents and not conducted a thorough verification. They sought the order to be set aside and the matter to be remanded for fresh verification. The Tribunal, after hearing the arguments, noted that the Commissioner (Appeals) had clearly found that service tax had been paid by the C&F Agents. The Tribunal emphasized the principle that service tax should be paid only once, not twice. Since the records did not indicate non-payment by the C&F Agents, the Tribunal found the demand for service tax on the respondents unsustainable. The Tribunal dismissed the appeal by the Revenue, upholding the impugned order and disposing of the cross-objection in the same terms.

In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) that service tax had been paid by the C&F Agents on outward transportation services, thereby relieving the respondents from the demand for service tax on the same. The Tribunal emphasized the importance of verifying records and ensuring that service tax is not levied twice, ultimately dismissing the Revenue's appeal.