CCE, Jaipur-II vs M/s Nirma Ltd.

Revenue is in appeal against the impugned order wherein ld. Commissioner (Appeals) has set aside the adjudication order by holding that the

respondent is not liable to pay service tax under the category of Good Transport Agency Services.

The brief facts of the case are that the respondent procured Dolomite and Limestone from the mines of M/s Sohan Singh Joginder Singh & Co. and

M/s Gurpreet Minerals & Chemicals, Udaipur. The goods are purchased by the respondent on FOR basis and did not pay any transportation charges.

Invoices also does not mention any transportation charges. But Revenue is of the view that the goods transported from the mines by the transporter to

the respondent’s factory, the respondent is liable to pay service tax on transportation charges. Therefore, impugned proceedings were initiated

against the respondent and a Show Cause Notice was issued on 15.5.2007 for the period 1.1.2005 to 30.9.2006 for demanding service tax on

transportation charges along with interest and penalties under Sections 76, 77 and 78 of Finance Act were also imposed. The adjudicating authority

confirmed the demand as proposed in the Show Cause Notice. On appeal preferred by the ld. Commissioner (Appeals), the adjudication order was set

aside. Aggrieved from the said order, Revenue is in appeal before us.

Shri B.B. Sharma, ld. AR submits that the impugned order is not sustainable in the eyes of law as the ld. Commissioner (Appeals) held that in this

case the extended period of limitation is not invokable therefore set aside the demand. Moreover, he also observed that as whatever service tax is to

be paid by the respondent the same is available as Cenvat credit to them. Therefore, it is a situation of Revenue neutrality. The observation made by

the ld. Commissioner (Appeals) is not correct. Therefore, the Revenue is in appeal and the same is to be allowed.

Heard the ld. AR and perused the record.

On perusal of the record, we find that in this case respondent has not paid any transportation charges to the supplier of the goods, as the goods

were received by them on FOR basis. As the respondent has not paid any transportation charges, the question of paying service tax does not arise. In

these circumstances, the ld. Commissioner (Appeals) has rightly held that extended period of limitation is also not invokable. In these terms, we do not

find any infirmity in the impugned order and the same is upheld. The appeal filed by Revenue is dismissed.

(Dictated & pronounced in open Court)