Same Transaction cannot be liable to Both Sales Tax & Service Tax

South Eastern Coalfields Vs Commissioner of Central Goods And Service Tax, Customs And Excise (CESTAT Delhi)

The dispute relates to the period 2014-15 and the appellant asserts that at the time of sale it recovered basic price of the coal, coal sizing charges, surface transport charges and other levies from the customers and paid the applicable excise duty/sales tax on the said amount.

The department however, believed that by recovering sizing charges, the appellant provided taxable service under the category of ‘business auxiliary service’. A show cause notice was issued by the department proposing such charges and the demand was ultimately confirmed by an order that has been impugned in this appeal.

Tribunal, after relying upon the decision of the Supreme Court in Bharat Sanchar Nigam Ltd vs. Union of India⁴, held that both sales tax and service tax cannot be made applicable on the same transaction. In this view of the matter, when the appellant is only cutting the size of the coal to be provided to the customers, it cannot be said that any service has been offered by the appellant to the buyer of coal.

FULL TEXT OF THE CESTAT DELHI ORDER

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