CESTAT sets aside Demand in respect of Cargo Handling Services and GTA Services in respect of Raw Sugar [Read Order]

In a recent case, the Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal( CESTAT) sets aside the demand in respect of Cargo Handling Services and GTA Services in respect of raw sugar on finding that the appellants have been subjected to repeated proceedings on the same issue which is decided by the Tribunal in the appellant’s own case.

The appellant, M/s. Aspinwall & Co. Ltd. are engaged in the provision of service related to import and export of goods at Chennai Port. A Show Cause Notice dated 12.4.2007 was issued to the appellants demanding service tax on services rendered viz. port service, cargo handling service and GTA service along with interest and penalties.

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Order in Original was issued confirming demands raised therein. Vide Order, an appeal filed by the appellants, the Commissioner (Appeals) upheld the service tax demanded on port services and cargo handling services; however, regarding the GTA service, he remanded the case to the original authority for requantification.

The appellant filed an appeal against the Order before the Tribunal. The Tribunal set aside the demand in respect of port services and upheld the demands in respect of cargo handling service and GTA service while setting aside the penalties. During the pendency of the appeal, the original authority has passed Order in Original again confirming the demands on all the three services in dispute.

The appellants preferred an appeal against this order to Commissioner (Appeals) who vide the impugned Order in Appeal upheld the Order in Original. The present appeal is directed against the Order in Appeal passed in the second round.

Counsel for the appellant submitted that the issue regarding the port services is no longer res integra having been decided by this very Bench in the same case in the first round; they have paid the applicable service tax in respect of cargo handling service and GTA service. Penalties were also set aside by the Tribunal and therefore nothing survives in the case. Accordingly, the impugned order needs to be set aside.

On the first round of litigation, the CESTAT held that “the impugned order is modified to the extent of setting aside the demand in respect of Port Services and upholding the demand in respect of Cargo Handling Services and Goods Transport Agency Services in respect of raw sugar. However, the penalties imposed in respect of Cargo Handling Services and GTA services are set aside.”

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The two-member bench Shri P. Dinesha, Member (Judicial) and Shri M. Anjani Kumar, Member (Technical) held that the authorities below should have refrained from passing an order in the remand proceedings when the issue was under consideration by the Tribunal.

The appellants have been subjected to repeated proceedings on the same issue which is decided by the Tribunal in the appellant’s own case and in respect of the very same proceedings. The Bench takes serious note of the same and cautions the authorities against any recurrence in this regard.

The issue being already decided by this Bench vide final order referred above, the impugned proceedings are infructuous as far as merits and consequences are concerned. The court set aside the impugned order and allowed the appeal with consequential relief.

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