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M/s Technical Associates Ltd. Versus Joint Commissioner, Central Excise, Lucknow

2018 (1) TMI 364 - CESTAT ALLAHABAD

CENVAT credit - reverse charge mechanism - delivering the transformers at their premises - Held that: - in view of the provisions of Rule 2(i)(d) of Service Tax Rules, 1994, it is the obligation of the service receiver namely the Power Corporation which is liable to service tax - the appellant was not liable to pay service tax under the scheme of the Act and the Rules and particularly as clarified vide N/N. 25/2012-ST - the service tax of ₹ 13,11,933/- paid by them is an excess payment, se .....

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/70045/2016-EX[SM] has been filed by the appellants against Order-in-Appeal No. 377-CE/APPL-LKO/LKO/2015 dated 29.09.2015. 2. The brief facts of the case are that the appellants are engaged in manufacturer of electric transformer falling under Chapter Heading 8505 of Central Excise Tariff Act, 1985. Appellants enter into the agreements with their customer for delivering the transformers at their premises on the amount as per agreement. Appellants arrange for transportation of goods and pays serv .....

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cepted as delivery to buyers on FOR basis. 4. Being aggrieved by the said order the appellant is before this Tribunal. The learned counsel for the appellant states that a similar issue in their own case, regarding eligibility to Cenvat Credit on availing goods transport agency services outward transportation of finished goods had arisen for the period February 2006 to December 2006. Vide order dated 08.09.2009 (Annexure-5 to memorandum of appeal page 66), this Tribunal was pleased to allow the c .....

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the appellants activity of arranging transportation of finished goods was like an activity of providing Goods Transport Agency Service. They were hiring trucks from third parties and charging freight from the customers. All the customers of the appellants are Power Corporation and in terms of Rule 2(1)(d) of Service Tax Rules, 1994, these Power Corporations were liable for payment of service tax. It was also submitted that the services of the other transporter was not liable taxable in view of .....

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ansport of finished goods to customers premises. It appears that department accepted the appellants contention and did not raise any demand for the period October 2013 onward. 7. Even otherwise, it would amount to double taxation if appellants are required to pay tax on hiring of trucks and on the same amount/activity, again the ultimate buyer (Power Corporation) is liable to pay tax. 8. The aforesaid view also stands confirmed by an order dated 16.01.2014 of Commissioner (Appeals), Lucknow in t .....

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In view of above provisions relating to goods transport agency service, service tax is payable by the person who prays the freight. In the present case, I find that freight is ultimately paid by the power corporation. The appellants role is like a transport agency. They have been hiring vehicles from SS Road Lines and other transporters. Therefore under the scheme of collection of tax on transportation of goods by road, service tax cannot be demanded from appellants. From the perusal of contrac .....

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