2008 (7) TMI 332 - AT - Service Tax

Demand from appellants who were holding stevedore licence from Port Trust appellant plea is that the Port Trust had collected service tax from the appellants on the stevedore charges - appellant submitted that, if the impugned demand is enforced, it would amount to double taxation - documentary evidence of the payments to the Port Trust is available with the appellants and that no opportunity for producing the same was given by the adjudicating authority despite a specific request - It is for the adjudicating authority to examine this evidence and deal with the assessee s plea of double taxation. stay granted

Summary

Issues:
1. Demand of service tax under the category of "Port Services" for the period April, 2002 to November, 2005.
2. Imposition of penalties on the appellants for default of service tax payment and filing of returns.
3. Allegation of double taxation due to service tax collection by the Port Trust.
4. Failure of the adjudicating authority to provide an opportunity for producing documentary evidence.

Analysis:
1. The judgment revolves around the demand of service tax under the category of "Port Services" for a specific period. The appellants held a stevedore license during the relevant time frame, and the service tax was imposed by the Commissioner amounting to over Rs. 51 lakhs. The appellants argued that the Port Trust had already collected service tax from them on the stevedore charges, leading to a potential case of double taxation. The Tribunal noted the existence of certain documents indicating service tax collection by the Port Trust, emphasizing the need for the adjudicating authority to thoroughly examine this evidence and address the plea of double taxation.

2. In addition to the service tax demand, penalties were imposed on the appellants for defaulting on service tax payments and filing returns. The Tribunal acknowledged the penalties but focused on the primary issue of service tax demand and the potential case of double taxation. Despite the penalties, the Tribunal found valid reasons to grant a waiver of pre-deposit and stay of recovery concerning the service tax amounts and penalties, indicating a temporary relief for the appellants pending further examination of the evidence and legal aspects.

3. The crucial aspect of the case involved the allegation of double taxation due to the collection of service tax by the Port Trust from the appellants. The appellants argued that enforcing the impugned demand would result in double taxation, highlighting the need for a detailed assessment of the documentary evidence showcasing the service tax payments to the Port Trust. The Tribunal recognized this concern and directed the adjudicating authority to delve into the evidence and address the potential issue of double taxation, underscoring the importance of resolving this aspect to ensure fair treatment and compliance with tax laws.

4. A significant procedural aspect highlighted in the judgment was the failure of the adjudicating authority to provide the appellants with an opportunity to produce documentary evidence supporting their claim regarding service tax payments to the Port Trust. Despite specific requests made by the appellants in response to the show-cause notice and during the hearing stage, the authority did not heed these requests. The Tribunal emphasized the importance of allowing the appellants to present their evidence and urged the adjudicating authority to consider the documentary proof provided by the appellants to address the issue of potential double taxation effectively.