In a significant, the Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) sets aside the demand for Service Tax on Ocean Freight Charges.
The revenue questioned whether the respondent-assessee, Kiri Dyes And Chemical Limited is liable to pay service tax on the service on Ocean Freight or otherwise.
Shri Sanjay Kumar, learned Superintendent (AR) appeared on behalf of Revenue/ Appellant submitted that though this issue is decided by Gujarat High Court in the case of SAL Steel Limited. But the Revenue has preferred SLP before the Supreme Court therefore, this matter may be kept pending till the outcome of the Supreme Court judgment.
Shri R.R. Dave, Consultant appeared on behalf of the respondent/ Assessee and submitted that the Commissioner (Appeals) relied upon the Gujarat High Court in the case of SAL Steel Limited and allowed the appeal of the respondent.
It was concluded in the above-said case that no IGST is leviable on the ocean freight for the services provided by a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India. Further held that the impugned notifications levying the tax on the supply of ocean freight service and making the importer of goods the person liable for paying the tax are also unconstitutional as there is no statutory sanction for levy and collection of such tax.
A single-member bench comprising of Mr Ramesh Nair observed that the issue of whether Ocean Freight/ Sea Transportation service is liable to service tax or otherwise has been decided in the case of SAL Steel Limited. Since there is no stay against the said High Court judgment, there is no infirmity in the impugned order which was passed relying on the jurisdictional High Court judgment in the case of SAL Steel Limited.
By following the judicial precedent, the Court upheld the impugned order and dismissed the appeal of the revenue.
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