2022 (1) TMI 1169 - AT - Service Tax

Levy of service tax - ocean freight paid for imported goods - HELD THAT - On the identical issue this Tribunal in the case of COROMANDEL INTERNATIONAL LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE ST VADODARA 2021 (10) TMI 1289 - CESTAT AHMEDABAD where it was held that The judgment of Gujarat High Court in the case of MESSRS SAL STEEL LTD. 1 OTHER (S) VERSUS UNION OF INDIA 2019 (9) TMI 1315 - GUJARAT HIGH COURT only after the proceedings concluded by the lower authority i.e. sanctioning authority. This judgment was challenged before the Hon ble Supreme Court by the Revenue but no stay was granted since the judgment was not delivered before passing the adjudication order and by the Commissioner (Appeals). In the present case also being identical issue involved following the aforesaid decision the appeal is allowed by way of remand to the adjudicating authority to pass a fresh order - appeal allowed by way of remand.

Summary

Issues:
Whether ocean freight paid for imported goods is liable to service tax in the hands of the appellant.

Analysis:
The judgment by the Appellate Tribunal CESTAT Ahmedabad involved the issue of whether the ocean freight paid for imported goods is subject to service tax. The appellant argued citing a previous decision in the case of Coromandel International Ltd. that they are entitled to a refund based on a judgment of the Hon'ble Gujarat High Court regarding the ultra-vires nature of levying service tax on ocean freight. The Revenue, represented by the Authorized Representative, contended that since the appellant had not challenged the assessment of service tax payment, they were not entitled to a refund based on a judgment of the Hon'ble Supreme Court in the case of ITC Limited. The Tribunal noted that the judgment of the Gujarat High Court was delivered after the lower authority's proceedings had concluded, and the Revenue's challenge to the judgment at the Supreme Court did not result in a stay. Therefore, the Tribunal allowed the appeal by remanding the case to the Adjudicating Authority for a fresh order, considering the Gujarat High Court judgment. The Tribunal emphasized that all issues were kept open for reconsideration.

In summary, the Tribunal's decision was based on the interpretation of previous judgments and the timing of the Gujarat High Court's decision in relation to the lower authority's proceedings. The Tribunal's ruling allowed the appeal by remanding the case for a fresh order, considering the judgment of the Gujarat High Court. The decision highlighted the importance of the timing of legal judgments in the context of ongoing adjudication processes and emphasized the need for a reconsideration of the matter in light of relevant legal precedents.