2019 (1) TMI 438 - AT - Service Tax

Liability of Service Tax - services rendered as a co-loader - penalty - Held that - This issue has already been considered and laid to rest by the decision of this very Bench of the Tribunal in the case of M/s. Concord Express Logistics India Pvt. Ltd. 2018 (8) TMI 255 - CESTAT CHENNAI , wherein this Bench after considering the applicability of the Board Circular dated 01.11.1996 as well as the judgement in the case of United Business Xpress India P. Ltd. 2016 (12) TMI 440 - CESTAT NEW DELHI has set aside the demand of service tax with respect to co-loader - the demand raised in respect of the services rendered as a co-loader cannot sustain and is required to be set aside. With regard to the demand for the period post 22.08.2007, however, the Ld. Advocate has conceded the same - The same is therefore upheld with interest thereon. Penalty - Held that - There being no suppression of facts on the part of the appellant to evade payment of service tax - penalty is set aside. It is deemed proper to remand the case to the file of the adjudicating authority who shall work out the demand for the period post 22.08.2007; and it is for the assessee thereafter to convince the adjudicating authority with regard to its claim of payment of tax - appeal allowed by way of remand.

Summary

Issues involved:
1. Challenge to Order-in-Original No. 07/2012 dated 22.02.2012 passed by the Commissioner of Central Excise, Chennai-II Commissionerate regarding service tax liability for the period from 01.05.2006 to 31.03.2009.

Detailed Analysis:

Issue 1: Liability for service tax as a co-loader for the period in dispute (01.05.2006 to 22.08.2007):
The appellant, engaged in providing Courier Agency Service, contested the demand of service tax for services provided as a co-loader under the category 'Business Support Service'. The appellant relied on a CESTAT decision and a Board Circular to support their case. The Tribunal referred to a previous decision where it was held that co-loaders are not liable to pay service tax as they do not provide services directly to the customer but to the courier agency. The Tribunal reiterated that the charges of co-loaders are ultimately recovered by the courier agency from the customer. Thus, the demand for service tax as a co-loader for the period in question was set aside based on the previous ruling and the Circular's clarification.

Issue 2: Liability for service tax for the period post 22.08.2007:
The appellant did not contest the demand for services provided as a co-loader for the period post 22.08.2007. The Tribunal upheld this demand with interest. The case was remanded to the adjudicating authority to calculate the demand for this period. The appellant was given the opportunity to prove payment of tax for this period. The penalty imposed on the appellant was set aside due to no suppression of facts to evade service tax payment.

Conclusion:
The Tribunal set aside the demand for service tax as a co-loader for the period from 01.05.2006 to 22.08.2007 based on previous rulings and a Board Circular. However, the demand for the period post 22.08.2007 was upheld with interest, and the case was remanded for further proceedings. The penalty imposed on the appellant was overturned due to no deliberate evasion of service tax payment.