Reverse Charge liability paid by Service Provider, should not be demanded again from Service Recipient

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We are sharing with you an important judgement of the Hon’ble
Mumbai CESTAT, in the case of Umasons
Auto Compo Pvt. Ltd. Vs. Commissioner of Central Excise & Customs,
Aurangabad [2014 – TIOL – 126 – CESTAT – MUM] 
on
following issue:
Issue:
Whether Service Tax can be demanded again
from the Service Recipient under reverse charge,
where the same has been paid by
the
 Service Provider and accepted by the
Department?
Facts &
Background:
M/s Umasons Auto Compo Pvt. Ltd. (“the Appellant” or “the assessee”) was
receiving Goods Transport Agency (“GTA”)
service from GTA service provider for which they were paying Service Tax to the provider of GTA service. The
provider of GTA service deposited the amount of Service Taxto the Department, which
was duly accepted by them. Subsequently, the Appellant has availed Cenvat
credit of the amount of Service Tax so paid to the provider of GTA service.
The Assessing Officer raised demand for Service Tax on GTA services availed by the
Appellant on the ground that in respect of GTA services, service recipient
(i.e. the Appellant) is liable to payService Tax in terms of Section 68(2) of the Finance Act, 1994
(“the Finance Act”), and if the same has been paid by the service provider, recipient can seek
refund of the same. The assessee preferred an appeal before the Commissioner of
Customs & Central Excise (Appeals), Aurangabad who has upheld the
Adjudication order and confirmed the demand. Hence the Appellant preferred an
appeal before the Hon’ble Mumbai CESTAT.


Held:
It is held by the Hon’ble CESTAT that once the amount of Service Tax is accepted by the Revenue from the
provider of GTA service, it cannot be demanded again from the recipient of the
GTA service
.
Therefore,
the Hon’ble CESTAT rejected the contention of the Department and decided the
case in favour of the Appellant.

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