Tamralipta Co-operative Spinning Mills Ltd. Vs Commissioner of C.G.S.T. and Central Excise (CESTAT Kolkata)
In Tamralipta Co-operative Spinning Mills Ltd. Vs Commissioner of CGST and Central Excise, the Customs, Excise and Service Tax Appellate Tribunal addressed multiple Service Tax demands arising from audit observations for the period 2013-14 to 2016-17. The appellant, engaged in manufacture of cotton yarn and operating under the Government of West Bengal, had received and provided various services while filing ST-3 returns. During audit, it was alleged that Service Tax was not paid on security services, hiring of cars, legal services, rent recovered from employees for accommodation, and goods transport agency services. Show cause notices were issued, and the demands along with interest and penalties were confirmed by the adjudicating authority and upheld by the appellate authority.
Before the Tribunal, the appellant contended that it was not liable to pay Service Tax on security services and hiring of cars since it was the service recipient, and liability rested with the service provider. It also argued that rent collected from employees equivalent to House Rent Allowance constituted free accommodation and was not taxable. The appellant conceded liability on legal charges and goods transport agency services.
The Tribunal held that Service Tax was not payable on security services and hiring of cars as the liability was on the service provider. It further held that rent recovered from employees equivalent to House Rent Allowance should be treated as free accommodation, and therefore, no Service Tax was payable. However, Service Tax liability on legal charges and goods transport agency services was confirmed along with interest. The Tribunal also held that no penalties were imposable considering the facts and circumstances. The appeals were disposed of accordingly.
