2018 (3) TMI 1429 - AT - Service Tax

Reverse Charge Mechanism - GTA Service for the transportation services received by them - extended period of limitation - Held that - the similar issue came up before this Tribunal in the case of Dinesh Chandra R. Agarwal Infracon Pvt. Ltd 2009 (10) TMI 395 - CESTAT, AHMEDABAD , where Tribunal hold that as whatever service tax would have been paid by the appellant the same was entitled to avail cenvat credit and the appellant was required to pay less service tax on their final services - the mala-fides against the appellant cannot be attributed, therefore, the extended period of limitation is not invokable - penalty set aside - appeal allowed.

Summary

Issues:
Appeal against demand confirmed under reverse charge mechanism on Goods Transport Agency services.

Analysis:
The appellant, a service provider under construction service, faced a demand under reverse charge mechanism for not paying service tax on Goods Transport Agency services received during a specific period. The appellant argued they had paid full service tax on all services provided under the contract, and thus, the extended period of limitation should not apply. The appellant cited precedents to support their case. The respondent opposed, citing a Supreme Court judgment on revenue neutrality. The Tribunal considered both arguments.

The Tribunal referred to the Supreme Court case cited by the respondent, emphasizing that the issue of revenue neutrality does not apply in this case. The Tribunal noted that if the appellant had paid service tax on Inward Goods Transportation Service and availed cenvat credit, they would have paid less service tax on the final services. Therefore, the Tribunal found the Supreme Court decision not directly applicable to the present case.

The Tribunal also referenced a previous case where it was held that the appellant, if paid service tax, could have availed cenvat credit and paid less service tax on final services. Consequently, the Tribunal concluded that the appellant's lack of mala-fide intention meant the extended period of limitation was not applicable. As a result, the demands related to the extended period were set aside, and the penalty imposed on the appellant was also waived.

In conclusion, the Tribunal disposed of the appeal based on the observations made, setting aside the demands related to the extended period and waiving the penalty imposed on the appellant.