CESTAT: Departmental Action Demanding Service Tax Initiated at Visakhapatnam Unit Does Not Warrants any Action in Kolkata Unit
CESTAT: Departmental Action Demanding Service Tax Initiated at Visakhapatnam Unit Does Not Warrants any Action in Kolkata Unit
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata by its coram comprising of P.K. Choudhary (Judicial Member) and K. Anpazhakan (Technical Member), affirmed that the departmental action demanding service tax at the Visakhapatnam unit does not warrant any action in the Kolkata unit.
In the present case, the Department had filed an appeal before the CESTAT against the impugned order dated 18th March, 2010 passed by Commissioner, wherein he had dropped the proceedings initiated in the show cause notice dated 23 March, 2010.
The Ld. Authorized Representative for the Department reiterated the grounds of appeal and stated that the Adjudicating authority had failed to verify whether the unit of the Respondent located at Visakhapatnam and Kolkata are one or the same are different. He also stated that the Adjudicating authority failed to verify whether the services rendered by the Respondent in their Visakhapatnam unit were similar to the services said to be rendered by them at Kolkata.
Per contra, the Ld. Advocate for the Respondent stated that their Head office is located in Kolkata and they have their branch office located at Visakhapatnam to perform their work at site. He submitted a copy of the letter dated 10 February, 2006 addressed to the Superintendent, Service Tax, Visakhapatnam, wherein they categorically stated that their branch office undertook the work of strapping of wire rod coils at Visakhapatnam. Accordingly, the Respondent contended that the service tax in respect the services rendered by their Visakhapatnam branch office has been dealt separately at Visakhapatnam.
The bench on perusal of the letter clearly found that the Respondent had indicated that the works at Rashtriya Ispat Nagam, Visakhapatnam was undertaken by their branch office at Visakhapatnam.
The CESTAT also noted that the Visakhapatnam Service Tax Commissionerate had initiated separate action against the Respondent at their Visakhapatnam unit for non-payment of appropriate service tax there.
The said litigation had attained finality vide the said Final Order of the Tribunal. Therefore, the CESTAT observed that Departmental action was already initiated demanding Service Tax against the Respondent at Visakhapatnam separately for the services rendered by their branch unit at Visakhapatnam.
“In the impugned order the Commissioner has rightly observed that action has already been initiated in Visakhapatnam and no further action is warranted in their Kolkata Unit,” the bench observed.
Accordingly, the CESTAT ruled that the Commissioner had rightly dropped the proceedings initiated against the Respondent in the impugned order, and no further action was warranted in their Head Office at Kolkata.
