Case Law Details

Case Name : M/s Bharat Petroleum Corporation Ltd. Vs. Commissioner of Service Tax (CESTAT Allahabad)
Appeal Number : Appeal No. ST/70453/2017-CU[DB]
Date of Judgement/Order : 25/01/2018
Related Assessment Year :
Courts : All CESTAT (731)

M/s Bharat Petroleum Corporation Ltd. Vs. Commissioner of Service Tax (CESTAT Allahabad)

Appellant’s J & K unit is recipient of GTA Services and services were also provided within the state of Jammu & Kashmir. Therefore, as per Section 64 of Finance Act, 1994 service tax cannot be levied on services rendered in Jammu & Kashmir, since the activity of services is not covered by Chapter No. V of the Finance Act, 1994 and that no provisions of act on service tax was applicable to services provided in Jammu & Kashmir.

FULL TEXT OF THE CESTAT ORDER IS AS FOLLOWS:-

The present appeal is directed against Order-in-Original No. 35/Commissioner/Noida/2016-17 dated 31/03/2017 passed by Commissioner of Service Tax, Noida.

2. The brief facts of the case are that the appellants were having Centralized Service Tax Registration at Noida. They are dealing with supply of petroleum products. They were issued with a show cause notice dated 13.04.2016 wherein it was alleged that during the period from April, 2011 to September, 2014 the services received by them in respect of GTA service in the state of Jammu & Kashmir, was not reflected in the relevant ST-3 return separately by them, presumpting that the said services were not liable to be taxed in their hand, since the state of Jammu & Kashmir was excluded for the purpose of service tax in the Finance Act, 1994. Revenue entertained a view that the said services were received by the appellant in the state of Jammu and Kashmir and as per Reverse Charge Mechanism appellant should have paid service Tax amounting to Rs. 2,47,95,302/-. Therefore, there was proposal to recover said amount of service tax with other proposals of interest and penalty. The issue was adjudicated through the impugned Order-in-Original dated 31.03.2014 wherein the demand was confirmed and equal penalty was imposed. Aggrieved by the said order, appellants have preferred present appeal before this Tribunal.

3. The Learned Counsel for the appellant has submitted that appellant’s J & K unit is recipient of GTA Services and services were also provided within the state of Jammu & Kashmir. Therefore, as per Section 64 of Finance Act, 1994 service tax cannot be levied on services rendered in Jammu & Kashmir, since the activity of services is not covered by Chapter No. V of the Finance Act, 1994 and that no provisions of act on service tax was applicable to services provided in Jammu & Kashmir.

4. Heard the learned A.R. for Revenue. He contended that recipient of service is liable to pay service tax under Reverse Charge Mechanism and therefore, appellants were liable to pay service tax.

5. Having considered the rival contentions and on perusal of provisions of the Act and facts on records, we find that provisions of service within the state of Jammu & Kashmir is beyond scope of Chapter No. V of the Finance Act, 1994. Therefore, no provision related to Service Tax Law is presently applicable to services rendered in the state of Jammu & Kashmir.

6. Therefore, we allow the appeal filed by the appellant by setting aside the impugned Order-in-Original. Appellant shall be entitled for consequential relief, as per law.

(Dictated in Court)

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