No Service Tax demand on CHA Services when already paid on behalf of Customs House Agent: CESTAT [Read Order]

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), held that no service tax can be demanded on CHA Services when already paid on behalf of Customs House Agent.

The appellants, M/s. Waymark Logistics are registered with the Service Tax Department for rendering CHA services. During audit of their accounts, it was noticed that though the appellant was registered with the Customs Department as a Custom House Agent, they had not issued any invoice in their name and had allowed another entity M/s. Trinity Clearing and Shipping Agencies to use their CHA license and service registration number in the invoices issued by M/s. Trinity Clearing and Shipping Agencies.

Thus, the service tax from the customers was collected by M/s. Trinity Clearing and Shipping Agencies and transferred to the appellant who in turn deposited the same into the Government account. It was noticed that the appellant did not discharge service tax liability. A Show Cause Notice was issued to the appellant proposing to demand service tax of Rs.6 lakhs along with interest and penalties.

The Counsel for the appellant, Dr. S. Krishnanandh submitted that the appellant had produced the bank statement along with the covering letter issued by bank to show that these amounts have been paid by M/s. Trinity Clearing and Shipping Agencies, towards discharging the service tax liability. The liability of service tax having been discharged, department cannot collect the same from the appellant.

The Counsel for the Revenue, Anandalakshmi Ganeshram contended that the payment having been made by M/s. Trinity Clearing and Shipping Agencies, Chennai, the appellant cannot be absolved from the service tax liability towards impugned services.

The Tribunal of Sulekha Beevi CS, Judicial Member observed that “The appellant has been contending that M/s. Trinity Clearing and Shipping Agencies, Chennai had collected the tax from customers and discharged the service tax on behalf of the appellant. The department cannot collect service tax again on the impugned service.”

“The liability of service tax on the impugned services having been discharged, I am of the view that the demand cannot be confirmed” the Tribunal said

To Read the full text of the Order CLICK HERE

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