Departmental Action Demanding Service Tax At Visakhapatnam Unit Does Not Warranted Any Action In Kolkata Unit: CESTAT

The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that departmental action demanding service tax at the Visakhapatnam unit does not warrant any action in the Kolkata unit.

The bench of P.K. Chaudhary (Judicial Member) and K. Anpazhakan (Technical Member) has observed that the Commissioner has rightly dropped the proceedings initiated against the respondent as the action has already been initiated in Visakhapatnam and no further action is warranted in their Kolkata Unit.

The appellant/department challenged the order passed by the commissioner, by which the commissioner dropped the proceedings initiated in the show cause notice.

The Department stated that the adjudicating authority failed to verify whether the units of the respondent located in Visakhapatnam and Kolkata are one or different. 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 in Kolkata.

The respondent/assessee stated that their head office is located in Kolkata, and they have their branch office located in Visakhapatnam to perform their work on site. The assessee submitted a copy of the letter addressed to the Superintendent, Service Tax, Visakhapatnam, in which it was categorically stated that their branch office undertakes the work of strapping wire rod coils at Visakhapatnam.

The Tribunal held that no further action is warranted in their head office at Kolkata and upheld the order passed by the Commissioner.

Case Title: Commissioner of Service Tax, Kolkata Versus M/s. Walzen Strips Private Limited

Case No.: Service Tax Appeal No.248 of 2011

Date: 04/05/2023

Counsel For Appellant: J. Chattopadhyay

Counsel For Respondent: N.K. Chowdhury

Click Here To Read The Order