Service Tax liable without Interest as Demand was raised on the Recipients of service of Goods Transport Operations: CESTAT partly allows appeal [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai Bench, partly allowed an appeal wherein the tribunal held that service tax was liable but without interest as demand was raised on the recipients of service of Goods Transport Operations.

The appellant, Tube Investments of India Ltd., was issued a show cause notice (SCN) proposing to demand service tax on the value of the taxable services by the goods transport operators along with interest and penalties for non-payment of service tax and non-filing of returns. The appellant replied stating that there cannot be any failure to make a return as during the relevant time there was no such requirement to do so.

It is to be noted that the appellant paid service tax of INR 2,34,325/- under protest in the absence of any SCN having been issued to them prior to the enactment of Finance Act, 2000. Thereafter, the appellant filed a refund claim on 23.09.2004 stating that it was a payment made under mistake of law.

After due process of law, the Adjudicating Authority confirmed the demand. When appealed, the Commissioner (Appeals) held that the service tax paid on the self-assessment was a valid collection of tax and rejected the appeal.

Before the CESTAT, the counsel for the appellant contended that the second SCN dated 08.11.2004 could not have been issued as the earlier SCN dated 11.04.2002 is stated to have remained unadjudicated. It was also contended that the appellant filed return on 12.11.2003 which is within the six months period and hence interest is not leviable.

The tribunal upheld the demand of service tax made, however, the interest upheld was set aside. The bench of Ajayan T.V. (Judicial Member) and M. Ajit Kumar (Technical Member) allowed the appeal partly.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates