9911796707
TMI Blog2024 (1) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... fund claim filed by the Appellant as barred by limitation. 2. The facts of the case in brief are that the Appellant is engaged in the manufacturing of adult diaper, hospital under pads etc., for which the Appellant imported certain raw material for use in relation to the manufacture of final products. For importing such raw material, the Appellant entered into an agreement with the foreign supplier for supply of goods on C.I.F basis i.e. cost, insurance and freight basis, under which the foreign supplier arranged the carriage of goods by sea to the port of destination. As the services of ocean freight were provided to the foreign supplier and not to the Appellant, hence the Appellant was not required to discharge service tax on the ocean f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow cause notice was adjudicated vide Order-in-Original dated 16.12.2019 rejecting the refund claim. Aggrieved with the same, the Appellant challenged the same in appeal, which was rejected by the Ld. Commissioner (Appeals) vide the impugned order. 5. Ld. counsel for the Appellant submitted that the agreement with the foreign supplier was on C.I.F basis and it was the foreign supplier who entered into an agreement with the foreign shipping line for transportation of goods and the Appellant was not privy to such an agreement. It was the foreign shipping line who was the service recipient, hence the Appellant was not required to pay service tax on ocean freight. The ld. counsel further relied on the decision of Hon'ble Gujarat High Court in S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule making power of section 94 also does not permit the Central Government to make rules for recovering service tax from a third party who is neither the service provider nor the service receiver. 39. Therefore, the impugned provisions i.e. Rule 2(1)(d)(EEC) and Explanation V to Notification No. 30/2012-ST are ultra vires Section 65B(44) defining "service" and Section 68, and also Section 94 of the Finance Act. ................................ 44. Even if it is assumed that service tax can be recovered from a third party like the Indian importers in CIF contracts, there is no machinery provision for valuation of the service, and therefore also the impugned Rules and Notifications are unenforceable. It is an admitted position of fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant cannot be fastened with any service tax liability on ocean freight. 10. Further, the Appellant has specifically pleaded in its reply to show cause notice and appeal memo submitted before the Appellate authority that the goods were imported under C.I.F contracts. This categorical pleading of the Appellant has not been disputed by the revenue in the adjudication order as well as the impugned order. This being the case, the present case is squarely covered by the dicta laid down in SAL Steel Ltd. (supra) and accordingly it is held that the Appellant is not liable to pay service tax on ocean freight. 11. As regards the appeal preferred by the revenue against the judgment of Hon'ble Gujarat High Court, no stay order has been passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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