Dept. cannot Demand Service Tax Paid under RCM  by Service Provider again from the Assessee: CESTAT [Read Order]

The Chennai bench of  Customs Excise and Service Tax Appellate Tribunal (CESTAT) held that demanding service tax from the appellant under Reverse Charge Mechanism (RCM) is not sustainable in law.

The fact is that the appellant, Chemix oil private Limited,  registered with the service tax department and was engaged in providing job work to M/s. Hindustan Unilever Ltd., Baddi and was paying service tax on the job charges received from M/s.HUL, Baddi.

The appellant’s premises were visited by the audit party and during the audit certain discrepancies were noted by the audit team and thereafter a show cause notice was issued to the appellant.

The audit team alleged that the appellant has received manpower supply services from various service providers during the period of October, 2014 to June, 2017 and has not discharged service tax under reverse charge mechanism.

With regard to input service of manpower supply service received from M/s. Sai Enterprises and M/s. JNV Enterprises, the counsel of the respondent submitted that the manpower supply services are taxable and tax is to be paid by service recipient under reverse charge mechanism.

The bench of S.S. Garg observed that the M/s Sai enterprises collected service tax on the 100% value and deposited the same to the government exchequer. Now demanding service tax from the appellant would amount to double taxation on the service.

Further the panel observed the decision of the tribunal in the case of Mahanadi Coalfield Ltd. and Mandev Tubes wherein it has been held that even if the tax is liable to be paid under RCM but the same is paid by the service provider, it was not open to the department to demand the same again from the assessee.

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