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2024 (12) TMI 14 - AT - Service TaxService Tax on Technical Testing and Analysis Service has been paid by the service recipient under Reverse Charge Mechanism-RCM - as alleged such demand is not tenable because testing of mint samples has not been considered under RCM u/s 68 (2) of the Finance Act, 1994 and in Rule 2 (1) (d) of Service Tax Rules, 1994 or in the relevant Notification issued by the Government from time to time and the statutory liability of service provider cannot be shifted on service recipient by mutual agreement until and unless the provisions of law allow doing so - HELD THAT - It is not disputed that the service recipient namely, M/s. MCX Sohan Lal Commodity Management Pvt. Ltd., New Delhi have in fact paid the Service Tax on Technical testing Analysis Service received by them from the Appellants. The Challans evidencing payment of such tax were submitted before the Adjudicating Authority below and again annexed with this Appeal. We find force in the contention of the Appellant that once the Service Tax has been discharged by the recipient of service, demand of Service Tax from the Appellant again will amount to double taxation which is not permissible under law. The case laws relied upon by the Appellant and the CBEC Circular dated 17.12.2004 are applicable in the facts and circumstances of the case. We also observe that the Appellants have been filing regular ST-3 Returns and maintaining the statutory records relating to payment of Service Tax wherein all the transactions were duly recorded. There is no allegation that any transaction was found beyond the mandatory records maintained by the Appellant. It is also an admitted fact that the Appellants are an autonomous body under Government of India, Ministry of MSME. We considered view that the extended period of limitation is not applicable in the instant case. My opinion on limitation also gets support from the decision of Continental Foundation Jt. Venture Vs. CCE, Chandigarh-1 2007 (8) TMI 11 - SUPREME COURT there is no question of payment of interest and the same are set aside. The penalty imposed is also set aside.
Issues Involved:
1. Applicability of Reverse Charge Mechanism (RCM) for "Technical Testing and Analysis Service." 2. Legitimacy of CENVAT Credit utilization by the Appellant. 3. Double taxation concerns. 4. Invocation of the extended period of limitation. 5. Imposition of penalty and interest. Issue-wise Detailed Analysis: 1. Applicability of Reverse Charge Mechanism (RCM): The primary issue revolves around whether the "Technical Testing and Analysis Service" availed by the Appellant falls under the Reverse Charge Mechanism (RCM) as per Notification No.30/2012-ST dated 20.06.2012. The Appellant argued that the service tax on these services was paid by the service recipient, M/s. MCX, under RCM. The Tribunal found that the service recipient had indeed paid the service tax under RCM, as evidenced by the challans and certificates submitted. The Tribunal noted that the learned Commissioner (Appeals) failed to acknowledge this evidence, which clearly indicated that the service recipient bore the service tax liability. 2. Legitimacy of CENVAT Credit Utilization: The Department contended that the Appellant availed inadmissible CENVAT Credit based on payments made by the service recipient. However, the Appellant provided an affidavit and supporting documents to demonstrate that they neither availed nor utilized any CENVAT Credit for the "Technical Testing and Analysis Service." The Tribunal accepted the Appellant's position, emphasizing that the service tax was paid by the recipient, and thus, no CENVAT Credit was availed by the Appellant. 3. Double Taxation Concerns: The Tribunal addressed the issue of potential double taxation, noting that once the service tax has been discharged by the recipient of the service, any further demand from the Appellant would result in double taxation, which is impermissible under the law. The Tribunal found force in the Appellant's contention and supported this view with relevant case laws and CBEC Circulars. 4. Invocation of the Extended Period of Limitation: The Tribunal examined whether the extended period of limitation was applicable in this case. It concluded that the extended period could not be invoked as the Appellant, being an autonomous body under the Government of India, did not exhibit any intent to evade tax. The Tribunal cited precedents where public sector undertakings were not subjected to the extended period due to the absence of mala fide intent. 5. Imposition of Penalty and Interest: Given that the demand for service tax itself was found unsustainable, the Tribunal set aside the imposition of penalty and interest. The Tribunal reiterated that since the service tax liability was already discharged by the service recipient, the Appellant could not be penalized for the same transaction. Conclusion: The Tribunal allowed the appeal, granting consequential relief to the Appellant. It emphasized that the service tax liability was appropriately discharged under RCM by the service recipient, and thus, the demands made on the Appellant were not justified. The Tribunal's decision underscored the principles of preventing double taxation and ensuring fair application of the law, particularly in cases involving governmental bodies.
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