2009 (5) TMI 102 - AT - Service Tax

GTA service - Commissioner vide his impugned order passed in revision held that it was the duty of the appellant to pay the duty and accordingly confirmed the tax - Commissioner in his impugned order has nowhere disputed that the service tax on the GTA services so availed by the appellant already stands paid by the transporters. He has only gone by the technical and mechanical implementation of the notification to hold that it was the responsibility of the assessee to deposit the amount. However, the fact remains that the tax amount stands deposited with the exchequer as the same was paid by the transporters, second time confirmation from the appellant is not called for. On this short ground itself I set aside the impugned order

Summary

Issues:
1. Liability to pay service tax on GTA services availed by the appellant.
2. Interpretation of Notification No. 36/2004-S.T.
3. Review of the Deputy Commissioner's order by higher authorities.

Analysis:
1. The appellant, engaged in manufacturing copper tubes, availed GTA services without paying service tax from January 2002 to July 2006. The audit objection led to proceedings initiated against the appellant. The Deputy Commissioner dropped the proceedings, noting that the service tax was paid by the appellant to the transporters, who then deposited it with the Revenue. The Original Adjudicating Authority examined the consignment notes and bills, confirming the payment by the transporters and vacated the show cause notice.

2. The higher authorities reviewed the Deputy Commissioner's order, and the Commissioner, in the impugned order, held the duty to pay the tax was on the appellant, confirming a tax liability of Rs. 1,10,246/- along with an equal penalty. Despite the tax being paid by the transporters, the Commissioner focused on the mechanical implementation of the notification, stating it was the appellant's responsibility to deposit the amount. The Tribunal found that since the tax amount was already deposited by the transporters, there was no need for a second confirmation from the appellant, setting aside the impugned order and reinstating the Original Adjudicating Authority's decision.

3. The Commissioner's order did not dispute that the service tax on the GTA services was paid by the transporters. The Tribunal emphasized that the tax amount had been deposited with the exchequer by the transporters, making a second confirmation by the appellant unnecessary. The Tribunal, based on this ground, allowed the appeal, setting aside the Commissioner's order and restoring the decision of the Original Adjudicating Authority.