2016 (8) TMI 1333 - AT - Service Tax

GTA service - Rule 4B of the Service Tax Rules 1994 - Held that - if no consignment note has been issued in terms of Rule 4B of the Service Tax Rules 1994 by the transporter the service tax liability under the category of GTA service does not arise - appeal allowed - decided in favor of appellant.

Summary

Issues:
Service tax demand on Goods Transport Agency service for transportation of coal from pit-head to railway siding; Absence of consignment note issued by transporters affecting service tax liability on the recipient.

Analysis:
The case involved a service tax demand of ?26,95,169/- with interest and a penalty of ?1,000/- imposed under Section 77 of the Finance Act, 1994 on the appellant for failing to discharge its service tax liability on the Goods Transport Agency service for transporting coal. The appellant argued that during the disputed period from January 2005 to March 2007, transporters did not issue any consignment note for the transportation of goods, leading to a lack of basis for sustaining the service tax demand on the recipient. The appellant cited a previous final order of the Tribunal in their own case, which held that without a consignment note as per Rule 4B of the Service Tax Rules, 1994, the service tax liability for GTA service does not arise.

The learned DR representing the respondent reiterated the findings of the impugned order passed by the Commissioner (Appeals). After hearing both sides and examining the records, the Tribunal noted the previous decision in the appellant's case where it was established that the absence of a consignment note by the transporter negates the service tax liability under the GTA service category. Consequently, the Tribunal set aside the impugned order and allowed the appeal filed by the appellant, granting any consequential relief as per the law. The decision was made based on the co-ordinate Bench decision in the appellant's case, emphasizing the significance of the absence of a consignment note in determining service tax liability.

In conclusion, the Tribunal's judgment revolved around the critical issue of the absence of a consignment note issued by transporters impacting the service tax liability on the recipient, ultimately leading to the setting aside of the service tax demand on the appellant for the Goods Transport Agency service related to the transportation of coal.