2019 (7) TMI 769 - AT - Service Tax

GTA Services - taxability - whether the appellant, a manufacturer of steel items having their Head Office and factory at Kolkata, having sent their finished goods from Kolkata to Jaipur Branch and have paid the service tax on GTA service at Kolkata, whether service tax can be again demanded at Jaipur? - HELD THAT - Service tax being a central tax, though normally required to be deposited within the jurisdiction of the Commissionerate where the assessee is registered and the same has been deposited at the Head office at Kolkata which have paid the freight charges and accounted for the same, and have also deposited the service tax, which is in accordance with the scheme of the provisions of Service Tax Act and Rules. The SCN is mis-conceived and not maintainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether service tax can be demanded at Jaipur when already paid at Kolkata for transportation of finished goods to Jaipur branch.

Analysis:
The appellant, a manufacturer of steel items, transferred finished goods from Kolkata to Jaipur branch and paid service tax on GTA service at Kolkata. The issue was whether service tax could be again demanded at Jaipur. The appellant was registered under Central Excise and Service Tax Department at Kolkata, while at Jaipur, they were registered under Central Excise as a dealer. A show cause notice was issued by the Deputy Commissioner at Jaipur demanding service tax, alleging that the branch office in Jaipur was the service receiver and liable to pay service tax on the GTA service received. The appellant contended that they had already paid service tax at Kolkata and provided evidence of payment. The Revenue claimed that the appellant should have registered for Service Tax at Jaipur and paid tax there. The Commissioner (Appeals) upheld the demand, noting discrepancies in the documents submitted by the appellant.

The appellant argued that they had not contravened the Service Tax Rules, as the freight was paid by the Head Office at Kolkata, and service tax was paid there as well. They provided detailed evidence of payment and compliance with tax regulations. The appellant claimed that the adjudicating authority failed to consider crucial facts, resulting in double taxation. The Departmental Representative supported the impugned order. The Tribunal considered the relevant provisions of the Service Tax Rules, emphasizing the requirement to deposit service tax with the Central Government by the specified date. The Tribunal noted that the appellant had paid the service tax at the Head Office in Kolkata, in accordance with the law. Therefore, the show cause notice was deemed misconceived and not maintainable. The Tribunal set aside the impugned order and allowed the appeal, granting the appellant consequential benefits.

In conclusion, the Tribunal ruled in favor of the appellant, stating that the service tax paid at Kolkata for transportation to Jaipur branch was in compliance with the Service Tax Act and Rules. The appellant was entitled to consequential benefits as per the law.