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2016 (1) TMI 973 - AT - Service TaxBusiness Auxiliary service or not - activity of collection/dispatch of Speed Post/Export Delivery Letter etc. on behalf of the Post Office - Revenue neutral exercise - Held that:- Before going into the merit whether the services is taxable or otherwise and also on the limitation, we find that the fact is not under dispute that the services provided by the assessee is at the most considered as input services for the postal department. The postal department is admittedly paying the service tax on the total value of the services which obviously includes service value of the assessee. In this situation, if service tax is paid by the assessee, the assessee's services is an input service for the postal department and postal department is entitled for Cenvat credit, thus in our view the present case is of Revenue neutral as the postal department is entitled for CENVAT credit of the service tax if at all payable by the assessee. This Tribunal, time and again held that in case of revenue neutral the demand does not exist. In view of the various judgments, it is clear that if service tax is paid by the assessee, same shall be available as Cenvat credit to the postal department and to that extent net liability of service tax shall stand reduced while paying the service tax by the postal department. Therefore, it is an exercise of revenue neutral for this reason demand does not exist. We, therefore, drop the demand on the point of revenue neutrality without addressing the issues of taxability of service tax and limitation. - Decided in favor of assessee.
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