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2015 (12) TMI 162 - AT - Service TaxDemand of service tax - GTA service - Trading and transportation of coal - Held that - Only for a small portion of demand (Rs. 238511.73) in respect of 7 customers, such confirmation could not be obtained and the Commissioner confirmed that much demand against the respondent which chose not to contest the same as it was a small amount but that cannot be a legal ground to assert that the respondent was liable to pay service tax under GTA service. The onus is on Revenue to establish that the respondent was liable to pay service tax under GTA service. We find that Revenue has not produced any consignment notes showing respondent as recipient of GTA service i.e. it was the consignor or consignee who paid freight for transport of coal. This adds to the credence to the contention of the respondent that the freight expenses shown in the balance sheet of the respondent represented the actual amount paid for hiring trucks. Mere hiring of trucks by a Goods Transport Agency does not constitute GTA service. We find that the invoices have been issued by M/s Coal Feeders which show names of the customers who purchased coal and to whom coal was consigned. Thus, M/s Coal Feeder became the provider of GTA service and as these invoices clearly mentioned freight to be paid by the consignee , the freight was rightly paid by the consignee along with service tax as has been confirmed in respect of 62 out of total of 69 consignees. - entire demand raised in the show cause notice actually stood paid (except for an amount of ₹ 238512/- which was confirmed vide the impugned order) and the crux of para 5.7 of CBEC instruction dated 17.12.2004 essentially is that in respect of GTA service, double taxation should be avoided. - Decided against Revenue.
Issues:
1. Interpretation of liability to pay service tax under Goods Transport Agency (GTA) service. 2. Treatment of respondent and its subsidiary firm as a single entity for tax liability. 3. Responsibility of discharging service tax on transportation services. 4. Application of CBEC instructions regarding payment of service tax by liable parties. 5. Determination of liability based on consignment notes and invoices. 6. Avoidance of double taxation in GTA service. Analysis: 1. The main issue in this case revolves around the interpretation of the liability to pay service tax under GTA service. The respondent was engaged in trading and providing transportation services of coal, leading to a demand for service tax. The Commissioner treated the respondent and its subsidiary firm as a single entity for tax liability purposes. 2. The responsibility of discharging service tax on transportation services was a key point of contention. The Revenue argued that the respondent should have paid the service tax as it paid the freight, while the respondent contended that the consignees who paid the freight were liable for the service tax under GTA service. 3. The application of CBEC instructions regarding the payment of service tax by the liable parties was also discussed. The respondent highlighted that the demand was confirmed for only a small portion where confirmation of payment could not be obtained, emphasizing the need to avoid double taxation in GTA service. 4. The determination of liability based on consignment notes and invoices played a crucial role in the judgment. The Tribunal noted that the invoices issued by the subsidiary firm clearly stated that the consignees were responsible for paying the freight and service tax, which was confirmed by 62 out of 69 consignees. 5. The Tribunal emphasized that even if the respondent was the buyer of coal in some cases, the liability to pay service tax under GTA service still rested with the consignees who paid the freight. The judgment highlighted the importance of avoiding double taxation in such cases. 6. Ultimately, the Tribunal found no infirmity in the impugned order and dismissed the appeal, upholding the Commissioner's decision regarding the liability for service tax under GTA service. The detailed analysis of consignment notes, invoices, and the application of CBEC instructions supported the conclusion that the service tax liability was appropriately determined in this case.
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