2016 (7) TMI 994 - AT - Service Tax

Cargo handling service - service receiver had deposited the service tax under the category of goods transport agency as the service recipient. It is his submission that since the service tax paid by the recipient of service has been accepted by the department and retained as legitimate tax due, confirmation of demand under the category of cargo handling service is not appropriate as the same amounts to double taxation. Held that - we are of the prima-facie view that the disputed service is not conforming to the definition of GTA Service. Therefore, we do not find merits in the submissions of the appellant for complete waiver of pre-deposit - stay granted partly.

Summary

Issues: Classification of service under Cargo Handling Service, Double taxation claim, Limitation period for service tax demand

In this case, the appellant, registered as a goods transport agency service, faced a service tax demand classified under Cargo Handling Service by the Department. The appellant argued that since the service receiver had already paid service tax under goods transport agency category, confirming demand under cargo handling service would lead to double taxation. Additionally, the appellant claimed that a portion of the demand was time-barred. The Revenue contended that the contract between the parties aligned with cargo handling service definition and cited a Tribunal decision to support their stance.

Upon review, the Tribunal noted that the service recipient had paid service tax under goods transport agency, accepted by the Department. It was observed that a significant portion of the demand was beyond the limitation period. Despite this, the Tribunal opined that the disputed service did not align with goods transport agency definition based on the activities performed by the appellant. Consequently, the Tribunal directed the appellant to deposit a specified amount within a set timeframe, failing which the appeal would be dismissed.