Himadri Speciality Chemical Limited Vs Commissioner of CGST & Central Excise (CESTAT Ahmedabad)
The CESTAT Ahmedabad allowed the appeal against the Commissioner (Appeals)’ order dated 16.05.2018, which had upheld a service tax demand of ₹1,67,291, interest and penalty under the reverse charge mechanism (RCM) in respect of alleged manpower supply services. The demand arose from audit findings that loading and unloading charges paid to a contractor attracted service tax under Notification No. 30/2012-ST. The appellant challenged the demand on jurisdiction, merits and limitation.
The Tribunal identified two issues: whether the show cause notice issued by Vadodara Audit-III Commissionerate and adjudicated by Valsad Commissionerate was without jurisdiction in view of the appellant’s centralized service tax registration with Kolkata Commissionerate, and whether the contract with the contractor constituted manpower supply service liable to service tax under RCM.
On jurisdiction, the Tribunal noted there was no dispute that the appellant held centralized registration with the Kolkata Service Tax Commissionerate. Relying on decisions in MIRC Electronic Ltd. and Larsen and Toubro Ltd., it held that the action of Vadodara Audit-III Commissionerate in issuing the show cause notice and Valsad Commissionerate in confirming the demand was beyond jurisdiction. On this ground alone, the service tax demand was held to be unsustainable.
