9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (1) TMI 526 - AT - Service TaxLevy of service tax - Business Auxiliary Service - Technical Inspection and Certification Service - GTA Service - extended period of limitation. Business Auxiliary Service - Technical Inspection and Certification Service - contention of the appellant is that the appellant has made certain deductions in the invoices raised to M/s.Bonprix, Germany, which are only discounts in a transaction of sale - HELD THAT - It is brought out from evidence that garments are sold by the appellant to M/s.Bonprix, Germany. M/s.JPS Trading, Dubai has played a role of middleman in making arrangements. The quality test is done by M/s.Fashion Force in India. According to the department, it is an agent of M/s.JPS Trading, Dubai. However, there is no payment made by the appellant to M/s.Fashion Force - It cannot be understood how there would be a service rendered by M/s.Bonprix, Germany to the appellant so as to be taxable under reverse charge mechanism. Even if there was any service rendered in regard to quality checking, the demand ought to have been raised against M/s.Fashion Force, who is the service provider for quality checking - If the department is of the view that Fashion Force, Tiruppur is the branch office of JPS Trading, Dubai then it would be M/s.Fashion Force, Tiruppur who is liable to pay service tax. It cannot be said that the deductions made in the invoices raised in the name of M/s.Bonprix, Germany is a payment made to Fashion Force, Tiruppur. For these reasons, the demand raised under BAS , Technical Inspection and Certification Service is without any factual or legal basis and requires to be set aside which we hereby do. The issue on merits is answered in favour of the appellant and against the Revenue. GTA Service - extended period of limitation - HELD THAT - Even if the appellant paid tax on GTA services, the appellant would be eligible for availing cenvat credit of the tax paid. The entire situation is revenue-neutral. In such situation, the extended period cannot be invoked as decided in the case of NIRLON LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI 2015 (5) TMI 101 - SUPREME COURT . The impugned order is modified to the extent of setting aside the demand, interest and penalties under Business Auxiliary Service , Technical Inspection and Certification Services . The demand, interest and penalties in regard to GTA Service is set aside for the extended period. The details as to whether GTA services were used only for export is not before us. Therefore, the appellant is liable to pay the tax on GTA services for the normal period along with interest. For the same reasons of revenue neutral situation, the penalties are set aside entirely. Appeal allowed in part.
Issues involved: Determination of liability to pay service tax under 'Business Auxiliary Service', 'Technical Inspection and Certification Service', and 'GTA Service'.
Business Auxiliary Service and Technical Inspection and Certification Service: The appellant, engaged in manufacturing and exporting knitted garments, received orders from M/s.Bonprix, Germany through M/s.JPS Trading, Dubai. The department alleged that deductions made by the appellant for bonus, inspection charges, and recycling compensation were for services falling under 'Business Auxiliary Service' and 'Technical Inspection and Certification Service'. The original authority confirmed the demand for the specified period. The appellant contended that the deductions were discounts in sales transactions, not payments for services. The Tribunal found the demand lacked factual or legal basis, as the services alleged were not provided by the appellant but by M/s.JPS Trading and M/s.Fashion Force. The demand under 'BAS' and 'Technical Inspection and Certification Service' was set aside. GTA Service: The appellant was also liable for service tax under 'GTA Service' for the period before and after 1.3.2008. The authorities granted abatement post-March 2008 but denied it for the period prior, citing non-compliance with a notification condition. The Tribunal held that services related to exports are not taxable, and even if tax was paid, it would be creditable to the appellant, making the situation revenue-neutral. Citing precedents, the extended period was deemed inapplicable. The demand, interest, and penalties under 'GTA Service' for the extended period were set aside, while liability for the normal period was upheld. Conclusion: The appeal was partly allowed, setting aside demands, interest, and penalties under 'Business Auxiliary Service' and 'Technical Inspection and Certification Services'. For 'GTA Service', liability for the normal period was confirmed, while the extended period demands, interest, and penalties were set aside due to the revenue-neutral nature of the transactions.
|
