Srisun Exim Services Vs Commissioner of Central Tax (CESTAT Hyderabad)
Summary: M/s Srisun Exim Services appealed against Order-in-Appeal dated 26.06.2024, under which the Commissioner (Appeals) partly upheld the department’s appeal and confirmed service tax demand of Rs.1,43,523, along with applicable interest and penalty, on the ground that the appellant had not produced Form A-2 for Financial Year 2016-17 in respect of services rendered to an SEZ unit. The Commissioner (Appeals) also upheld levy of late fee for delayed filing of ST3 returns.
The appellant was registered with the service tax department and was engaged in providing Business Auxiliary Service, Cargo Handling Service and Goods Transport Agency Service. A Show Cause Notice alleged short-payment of service tax based on the difference between turnover reflected in Form 26AS and turnover declared in the ST3 returns.
The Adjudicating Authority, after detailed verification of invoices, books of accounts and supporting records, found that the difference represented non-taxable reimbursements, transportation expenses incurred on behalf of customers, freight forwarding charges and supplies made to SEZ units. It recorded a categorical finding that service tax had already been discharged on the taxable component and dropped the proceedings.
The department appealed. While agreeing with the Adjudicating Authority regarding reimbursements and taxable turnover, the Commissioner (Appeals) held that exemption relating to services provided to the SEZ unit was inadmissible because Form A-2 for the relevant year had not been produced. Service tax of Rs.1,43,523 was consequently confirmed.
