2019 (2) TMI 676 - AT - Service Tax

Taxability - GTA service - amounts paid by the appellant to various transport authority/individual owners of truck for transferring of styrene monomer from port to appellant premises - period January, 2005 to July, 2006 and August, 2006 to June, 2007 - Held that - The issue decided in the case of M/S LG POLYMERS INDIA PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, VISAKHAPATNAM - I 2018 (10) TMI 553 - CESTAT HYDERABAD , where the abatement of 75% on the value of the freight is extended. The benefit of abatement of 75% on the freight value is eligible to the appellant, this 75% of the abatement of the freight value of the appellant needs to be extended. Penalties - Held that - Since, the issue involved in this case was being agitated in various courts, the penalty imposed by the lower authorities are unwarranted and are set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Taxability of amounts paid for transportation of styrene monomer from port to premises.

Analysis:
The case involved the taxability of amounts paid by the appellant to transport authorities/individual truck owners for transferring styrene monomer from the port to the appellant's premises during specific periods. The appellant, a manufacturer of chemicals, imported raw materials like styrene monomer for use in the factory. The Revenue contended that the amounts paid for transportation through tankers were taxable under the reverse charge mechanism. The appellant disputed this demand.

The appellant's counsel argued that in a previous case involving the same assessee, the bench had allowed an abatement of 75% on the value of freight, which was not extended in the current case by the lower authorities. The Departmental Representative supported the lower authorities' findings. Upon review, the Tribunal noted that a similar issue had been decided previously, holding the service tax liability to be on the appellant. The Tribunal agreed with the earlier decision and found no reason to deviate from it.

Regarding the abatement issue raised by the appellant's counsel, the Tribunal acknowledged the merit in the submissions. It was determined that the appellant was eligible for a 75% abatement on the freight value. The Tribunal directed the adjudicating authority to recalculate the tax liability by considering the abatement and instructed the appellant to discharge the recalculated tax amount promptly. Additionally, due to the issue being litigated in various courts, the penalties imposed by the lower authorities were deemed unwarranted and were consequently set aside under Section 80 of the Finance Act, 1994. The appeals were disposed of accordingly.