2015 (1) TMI 813 - AT - Service Tax

Waiver of pre-deposit of Service Tax - Penalty u/s 78 - GTA Service - Held that - applicants had engaged various transporters who are owning the tankers in transferring the material or according to them for movement of their own goods from one location to another location. From the schedule of rates annexed at page 84 of the appeal memorandum, we find that for transfer of the goods, the respective transporters were paid on the basis of running of the tankers per km. basis and the contract is for three years from the date of deployment of the tanker. Prima facie, at this stage, we are convinced that the applicants had received the services of Goods Transport Agency Service during the relevant period and accordingly, the same is taxable. However, also prima facie, we find force in the submission of the ld. Advocate for the applicant that even the demand is confirmed, the same would be around 44.40 lakhs, The applicant has annexed the detailed workings in support of their claim being duly signed by their Finance Manager and hence carries weight in view of the fact that the applicant is a public sector undertaking, In these premises, the applicant could not make out a case for total waiver of pre-deposit of duty - Partial stay granted.

Summary

Issues:
Waiver of pre-deposit of Service Tax and penalty under Section 78 of the Finance Act, 1994.

Analysis:
The appellant, a public sector undertaking, sought waiver of pre-deposit of Service Tax amounting to Rs. 64,49,366 and an equal penalty imposed under Section 78 of the Finance Act, 1994. The appellant argued that the services received from tanker owners for internal movement of goods should not be considered as Goods Transport Agency (GTA) services since there was no consignor, consignee, or consignment note issued. The appellant contended that the actual demand payable by them should be Rs. 44.40 lakhs, supported by detailed worksheets. The Revenue, however, reiterated the findings of the Commissioner but acknowledged the difficulty in confirming the correctness of the demand at Rs. 44.40 lakhs.

Upon hearing both parties and examining the records, the Tribunal found that the appellant had engaged transporters who owned tankers for material transfer or movement of goods. The schedule of rates indicated payment to transporters based on running of tankers per km for a three-year contract period. The Tribunal was convinced that the appellant had received GTA services during the relevant period and that such services were taxable. Despite this, the Tribunal acknowledged the appellant's claim that the demand, if confirmed, would amount to around Rs. 44.40 lakhs. The detailed workings provided by the appellant, signed by their Finance Manager, carried weight given the appellant's status as a public sector undertaking.

Consequently, the Tribunal directed the appellant to deposit 25% of Rs. 44.72 lakhs within eight weeks and report compliance by a specified date. Upon compliance, the balance dues would be waived, and recovery stayed during the appeal's pendency. Failure to deposit the required amount would lead to the dismissal of the appeal without further notice.