Demanding ST again on Ocean freight already included in value of goods imported amounts to double taxation: CESTAT

Case Details: Chryso India (P.) Ltd. v. Commissioner, Central Excise Goods and Service Tax, Rajasthan - [2021] 132 taxmann.com 195 (New Delhi - CESTAT)

Judiciary and Counsel Details.

• • Anil Choudhary, Judicial Member.
  • G.G. Gupta, Adv. for the Appellant. 
  • Mahesh Bhardwaj, AR for the Respondent.

Facts of the Case

The appellant was a manufacturer of chemical and it imported raw material and accordingly discharged customs duty along with CVD etc. on the CIF price. In the course of audit, it was pointed out that the appellant was liable to pay service tax on reverse charge basis on freight. The appellant in response to the audit objection deposited the amount but later filed the refund application, praying for refund of the amount of tax with interest paid. The application was rejected and it field appeal.

CESTAT Held

The Honorable Tribunal observed that the refund of such payment was claimed on ground that tax cannot be levied twice on same activity. The service tax was paid on ocean freight which was already included in value of inputs imported on CIF basis in respect of which Customs duty and CVD already paid. Since transaction value of imported inputs also included ocean freight on which Customs duty and CVD already paid, demanding Service Tax again on such freight amounts to double taxation and appellant had rightly filed the refund claim and entitled to refund of the service tax along with interest deposited.