Birla Corporation Limited Vs Commissioner, Central Excise CGST Udaipur (CESTAT Delhi)
The appellant is engaged in the manufacture of cement. They imported some machines/inputs on CIF and FOB basis. During the course of Audit, it was observed that the appellant has short paid service tax on Ocean freight, which is liable to be paid by the importer in terms of Notification No.15/2017-ST and 16/2017-ST, both dated 13.04.2017 w.e.f. 23.04.2017. Show cause notice dated 20.12.2018 proposed the demand of service tax amounting to Rs.23,60,643/-. On adjudication, the demand was reduced to Rs.7,67,085/-. The appeal filed by the appellant was rejected by the first appellate authority.
The law has been well settled in terms of the decision of the Gujarat High Court in case of SAL Steel Limited and consistently followed by the Tribunal, the ocean freight is not liable to service tax and hence, no liability can be fastened on the appellant under reverse charge basis.
The impugned order is, therefore, set aside and the appeal stands allowed.
FULL TEXT OF THE CESTAT DELHI ORDER
1. Birla Corporation Limited1 has challenged the Order-in-Appeal No. 901 (CRM)ST/JDR/2019 dated 16.12.2019 holding the appellant liable to pay service tax on „Ocean Freight‟ as an importer of goods.
