2023 (1) TMI 189 - AT - Service Tax

Liability of appellant to pay service tax - M/s. Trinity Clearing and Shipping Agencies, Chennai had collected the service tax using the appellant s registration number and paid the service tax - it is contended that the appellant is liable to pay the tax - HELD THAT - The appellant has been contending that M/s. Trinity Clearing and Shipping Agencies, Chennai had collected the tax from customers and discharged the service tax on behalf of the appellant. True that it may be, that the appellant cannot sublet their CHA license or allow M/s. Trinity Clearing and Shipping Agencies, Chennai to use their service provider registration number, the facts reveal that service tax in regard to the impugned service has been already paid to the Government. The department cannot collect service tax again on the impugned service. From the letter dated 3.1.2023 issued by Deputy Commissioner (Review and Tribunal), it has been categorically stated that an amount of Rs.3,86,829/- and Rs.3,70,308/- has been paid by M/s. Trinity Clearing and Shipping Agencies, Chennai towards service tax on impugned service. The liability of service tax on the impugned services having been discharged, the demand cannot be confirmed. The impugned order cannot sustain - Appeal allowed.

Issues:
1. Appellant's liability for service tax collected by another entity.
2. Discharge of service tax liability by the appellant.
3. Confirmation of demand by original authority and Commissioner (Appeals).
4. Verification of payment by the Tribunal.
5. Department's contention on the payment made by another entity.
6. Tribunal's decision on the discharge of service tax liability.

Issue 1: Appellant's liability for service tax collected by another entity
The appellant, registered for CHA services, allowed another entity to use their CHA license and service registration number for invoicing. The service tax collected by the other entity was transferred to the appellant, who deposited it into the Government account. The dispute arose when the appellant did not discharge the service tax liability for a specific period, even though the other entity collected the tax using the appellant's registration number.

Issue 2: Discharge of service tax liability by the appellant
The appellant contended that the service tax for the disputed services had been paid by the other entity, providing proof of payment through bank statements and letters. The appellant argued that the amount collected by the other entity was already paid towards the service tax liability, and thus, the department should not collect the same amount from them.

Issue 3: Confirmation of demand by original authority and Commissioner (Appeals)
The original authority and Commissioner (Appeals) confirmed the demand for service tax against the appellant, imposing penalties for non-payment. They found that the appellant failed to substantiate their claim that the service tax had been discharged by the other entity on their behalf, leading to the confirmation of the demand.

Issue 4: Verification of payment by the Tribunal
The Tribunal, after hearing the submissions, passed an interim order directing the department to verify whether the service tax amount had been paid or collected by the Government. The Tribunal considered the bank statements provided by the appellant and requested verification of the payment details before making a final decision.

Issue 5: Department's contention on the payment made by another entity
The department contended that even if the disputed amount had been paid as service tax by the other entity, the appellant could not be absolved from the service tax liability. They argued that since the payment was made by the other entity using the appellant's registration number, the appellant remained liable for the service tax on the disputed services.

Issue 6: Tribunal's decision on the discharge of service tax liability
After reviewing the evidence and submissions, the Tribunal found that the service tax for the disputed services had indeed been discharged by the other entity. The Tribunal held that the department could not collect the service tax again on the same services, as the liability had already been fulfilled. Consequently, the Tribunal set aside the impugned order, allowing the appeal with consequential relief, if any.

This detailed analysis covers the issues involved in the legal judgment, highlighting the arguments presented by both parties and the final decision rendered by the Tribunal.

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