2019 (3) TMI 112 - AT - Service Tax

Commercial and Industrial Construction Service - Supply of Tangible Goods service - Held that - The appellant is not disputing the liability of service tax confirmed by the adjudicating authority under the category of Commercial and Industrial Construction Service as also under the category of Supply of Tangible Goods - we do not discuss the dispute relating to these services, but uphold this portion of demand. Cargo Handling Service - Held that - One type of orders were executed for supply of materials such as river sand and crusher grit. We have perused some of the purchase orders received by the appellant for this activity. The purchase order clearly shows that the contract was for supply of material and can by no stretch of imagination, be considered as for providing Cargo Handling Service - no service tax is payable for this activity under the category of Cargo Handling Service - demand set aside. Appropriation of Service Tax amount of ₹ 31,30,180/- - Held that - The Consultant for the appellant has submitted that this amount is incorrect and that appellant has totally paid a sum of ₹ 34,37,399/-. The adjudicating authority is directed to verify this fact and correct his record. It is seen from the record that the appellant has already discharged the service tax as admitted by them under the category of Commercial or Industrial Construction Service , Supply of Tangible Goods Service as well as for Transportation of Goods under GTA - the demands for service tax set aside under the category of Cargo Handling Service - Since the entire liability has already been discharged by the appellant even prior to issue of show cause notice, there is no justification for imposition of penalty under section 76 - penalty set aside. Appeal disposed off.

Summary

Issues:
Service tax liability under different categories challenged in appeal.

Analysis:
The appellant was engaged in providing various services and registered with the service tax department, regularly paying service tax. The department issued a show cause notice for demanding differential service tax not paid by the appellant. The adjudicating authority dropped a portion of the demand due to a typographical error but held the balance as payable with interest and penalty. The appellant challenged the impugned order, represented by a Consultant. The arguments focused on disputing demands under Cargo Handling Service categories. The appellant accepted liability for Commercial and Industrial Construction Service and Supply of Tangible Goods. The Consultant argued against the demands for Cargo Handling Service, emphasizing the nature of contracts for supply of materials not falling under Cargo Handling Service. The appellant claimed to have discharged Goods Transport Agency liability and disputed the amount for appropriation. The Consultant contended that since the entire service tax liability was already paid before the show cause notice, no penalty should be imposed under Section 76.

The learned DR supported the impugned order, specifically justifying the demand related to transportation of limestone as falling under Cargo Handling Service. The Tribunal noted that the appellant did not dispute liability under Commercial and Industrial Construction Service and Supply of Tangible Goods, upholding this portion of the demand. Regarding Cargo Handling Service demands, the Tribunal analyzed the nature of contracts executed by the appellant for supply of materials and transportation of limestone. It concluded that these activities did not qualify as Cargo Handling Service but fell under Goods Transport Agency, for which the appellant had already discharged the liability. The Tribunal set aside the demands under Cargo Handling Service categories. It directed the adjudicating authority to verify the total tax paid by the appellant and corrected the record. As the entire service tax liability was already discharged by the appellant before the show cause notice, the Tribunal found no justification for imposing a penalty under Section 76 and set it aside. Consequently, the appeal was allowed in favor of the appellant.