[ORDER PER: A.K. JYOTISHI]

M/s Arunachala Logistics (P) Ltd., (hereinafter referred to as appellant) are in appeal against the order of the Commissioner (Appeals) dated 12.01.2018 (impugned order), whereby, he has upheld the order passed by the Original Authority in so far as tax demand was concerned, though the penalty under Section 78 was reduced to Rs. 9,30,871/- as against the penalty of Rs. 18,61,742/- imposed by the Original Authority.

The brief fact of the case is that the appellants are engaged in providing ‘Clearing and Forwarding Agent Services’ and ‘Goods Transport Agency (GTA) Services. The Department noticed that they were incurring certain expenditure towards receipt of security services from various service providers, who were other than body corporates and therefore in terms of Section 68(2) of the Finance Act 1994 read with Notification No. 30/2012-ST dated 20.06.2012, the appellants were liable to pay service tax on such security services received by them to the extent of 75% of tax payable. On adjudication, Adjudicating Authority has simply taken into consideration the provisions of Notification No. 30/2012-ST holding that the appellants were required to pay partial service tax under Reverse Charge Mechanism (RCM). He did not agreed with the contention of the appellant that as per their agreement with the service provider, service tax was liable to be paid by the service provider and the same was reimbursed by the appellant to them and therefore there is no loss of revenue. The Commissioner (Appeals) has also only taken into account the statutory provisions and held that as per the statutory provision, the service tax was required to be paid under RCM to the extent of 75% of the service tax payable and also holding that they cannot disown the responsibility cast on them under the law on the grounds that the service provider had paid entire amount of service itself on the service received by them. It was also observed that even assuming their plea is admissible, they need to establish that tax had, in fact, been paid by such service provider. However, it was not established that said providers had paid the service tax and there is no evidence that the service providers had in fact paid 100% on the service provided.

Learned Advocate submits that as is apparent from the original order that in terms of the work orders issued, service tax being collected by the service providers and reimbursed and that the ST-3 returns of the service providers show that they had paid service tax on the entire consideration though this amount is shown as payable under RCM. The invoices issued by the service provider show that the service tax was collected by providers. In this regard, he is also relying on various case laws cited below in support of that the appellant is not required to pay the tax again:

i) Mahanandi Coalfields Ltd., Vs Commissioner of CGST &CX, Rourkela Commissionerate [2020 99) TMI 477 – Cestat Kolkata]

ii) Utility Labour Suppliers Vs Commissioner of CE, Ahemadabad-II [2024 (11) TMI 1227 – Cestat Ahmedabad]

iii) Saraswati Engineering Vs CCE & ST, Rajkot [2023 (12) TMI 1005 – Cestat Ahmedabad]

iv) Dhariwal Industries Ltd., Vs CCE & C.-Anand [2023 (10) TMI 595 – Cestat Ahmedabad]

v) Transpek Silix Industries Pvt Ltd., Vs Commr of C. Ex, Vadodara-I [2018 (17) GSTL 434 (Tri-Ahmd)]

He is also submitting that under indirect tax, there is no bar in paying service tax by person other than one liable to pay service tax. He is relying on the following judgments:

i) Delhi Transport Corporation Vs Commissioner of Service Tax [2015 (38) STR 673 (Del)]

ii) Jay Jee Enterprises Vs CCE & ST, Daman [2021 (9) TMI 1201 – Cestat-Ahmedabad]

He is also contesting the invocation of extended period is bad in law as the entire case has been based on appellant’s own records. Moreover, the appellant is also eligible for taking credit and therefore there could not have been any malafide intent in not paying the s

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