Saibaba Chemicals Industries Vs Commissioner of C.E. & S.T. (CESTAT Ahmedabad)
The appeal before the CESTAT Ahmedabad arose from an order confirming a Service Tax demand of Rs. 1,17,881 along with interest and penalties against a manufacturer of excisable goods for the period April 2011 to March 2015. During audit, it was noticed that the appellant had not paid Service Tax under the Reverse Charge Mechanism (RCM) on Goods Transport Agency (GTA) services received from M/s. Kaveri Transport Carriers. The Department contended that, being a partnership firm paying freight for transportation of goods, the appellant was liable to pay Service Tax under Section 68(2) of the Finance Act, 1994 read with the relevant Service Tax Rules and notifications.
The appellant argued that the transporter had already charged, collected, and deposited the Service Tax with the Government. In support, the appellant produced the transporter’s Service Tax registration, invoices, declarations, ST-3 returns, challans, and related calculations. It was submitted that once Service Tax had been paid by the service provider, the same tax could not be recovered again from the service recipient under the Reverse Charge Mechanism. The appellant also contended that any further demand would amount to double taxation of the same service.
