Principal Commissioner, Central Goods & Services Tax, Meerut Vs Neeru Enterprises (CESTAT Allahabad)
CESTAT Allahabad dismissed the Revenue’s appeal in Excise Appeal No.70435 of 2020 concerning service tax deposited by Neeru Enterprises on ocean freight. The Commissioner (Appeals) had held that amounts deposited during audit towards service tax, interest and penalty on ocean freight remained deposits without authority of law because no show cause notice had been issued for demand of tax or imposition of penalty.
The Commissioner (Appeals) also relied upon the Gujarat High Court decision in Sal Steel Ltd. v. Union of India, which had struck down the relevant provisions imposing service tax on ocean freight from importers, and held that the refund could not be rejected by travelling beyond the scope of the show cause notice.
The Revenue challenged the order, contending that transportation by vessel from outside India up to the Indian customs station had a sufficient nexus with India, that the place of provision under Rule 10 of the Place of Provision of Services Rules, 2012 was India, and that the Finance Act, 1994 empowered the Government to prescribe the person liable to pay service tax and the valuation mechanism. The Revenue relied, among other authorities, on GVK Industries Ltd., Glyph International Ltd., Gujarat Ambuja Cements, Supreme Court Employees Welfare Association, Subhash Photographics and Avinder Singh. The Tribunal noted that the Commissioner (Appeals) had followed the Gujarat High Court’s decision in Sal Steel Ltd. [2020 (37) G.S.T.L. 3 (Guj.)].
