The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service providers are not liable to pay service tax when already paid by service recipient under reverse charge mechanism.
The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that once the service tax on entire value has been discharged there cannot be double taxation. The service tax has been paid by the Pharma companies onAppellant’s activity.
The Appellant/assesse basically provided the Labours to the pharmaceutical companies as may be required to provide for packing, loading/unloading, cleaning and maintenance etc. works at factory.
As per the records available with the Division office and on going through the Third party data provided by CBDT of the Appellant for the F.Y. 2015-16 and 2016-17, the total sales of services (value for ITR /Form 26A) were found to be not tallying with gross value of service provided, as declared in ST-3 returns.
Therefore, it appeared that the Appellant had declared less/not declared any taxable value in their ST-3 return for F.Y. 2015-16 and 2016-17 as compared to the value declared in their form 26AS and it appeared that the Appellant had short paid service tax to the extent of Rs. 2,08,98,239/- on the differential value of Rs. 14,16,60,121/-.
On the basis of the enquiry, a Show Cause Notice was issued proposing the Service tax demand along with interest and penalty. The Commissioner confirmed the demand of service tax along with interest and penalty.
The assessee submitted that appellant have provided Manpower Recruitment Service to various companies. As per the Notification No. 30/2012-ST as amended Appellant are not liable to pay Service tax. On the services of the Appellant recipient is liable to pay service tax. He also submits that during the disputed period the recipients of services have paid the service tax on appellant’s services. He produced the copy of certificates issued by the service recipients. Since the demand of service tax was already paid by the Service recipient under reverse charge mechanism on supply on manpower supply service, demand of service tax on same value would amounts to double taxation.
The tribunal held that once tax already paid on the services, it was not open to the Department to confirm the same against the appellant, in respect of the same services.
The tribunal allowed the appeal and quashed the order.
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Case Details
Case Title: Utility Labour Suppliers Versus Commissioner Of C.E.-Ahmedabad-II
Case No.: Service Tax Appeal No. 10780 Of 2022-DB
Date: 26.11.2024
Counsel For Appellant: Vipul Khandhar
Counsel For Respondent: Rajesh Nathan
