2018 (12) TMI 1786 - AT - Service Tax

Classification of services - transport of goods by road service - supply of the tangible goods service - it has been alleged that the assessee has provided goods transport agency service to air force station at Jodhpur, however, they have not discharged their service tax liability on the same - time limitation - HELD THAT - The show cause notice mentioned at Sl. No. (i) and one mentioned at Sl. No. (iii) are both hit by period of limitation because previously also the appellant has been issued a show cause notice No. V (ST)/SCN/759/JDR/07/307 dated 29 March 2007 which was adjudicated by the order-in-original No. 583/ST/2009-10 dated 12 July 2010 wherein a demand under the goods transport agency service was confirmed against the appellant and same was dropped by the Commissioner (Appeals) holding that the activity undertaken by the appellant does not qualify to be classifiable under the goods transport agency service. These facts were undoubtedly in the knowledge of the department and the department still chose to issue a show cause notice dated 09/10/2012 covering a period from 2007-2008 to 2011-2012 by invoking the extended time proviso under Section 73 of the Finance Act, 1994 and again classifying the activity undertaken by the appellant under the Goods Transport Agency Service. The department has been aware about the activity of the appellant since very beginning and, therefore, we do not find any justification in invoking the extended time proviso under Section 73 of the Finance Act, 1994 - Secondly, since the issue of the classification of the activity undertaken by the appellant have already been decided by the Commissioner (Appeals) as we have been told there is not appeal against the said order, we feel that the subordinate officers should have shown some sense of discipline and would have respected the findings of the Commissioner (Appeals) while deciding the matter. The Commissioner (Appeals) need to take all the three show cause notices for consideration at a time and issue is pertaining to the classification of the service on the basis of the documents available in the adjudication file of the department as well as with the appellant need to be scrutinized to reach at a conclusion as to whether the appellant is providing supply of the tangible goods service or goods transport agency service - since the issue have been before the department since 2007 when the first show cause notice which was adjudicated vide the order-in-original No. 583/ST/2009-10 dated 12 July 2010 which has also been decided by the Commissioner (Appeals) subsequently, the legal maintainability of the show cause notices need to be examined in view of above fact whether same are barred by period of limitation as per the provisions of Section 73 of the Finance Act, 1994 or not. Matters remanded to Commissioner (Appeals) for re-adjudication of all the three matters - appeal allowed by way of remand.

Summary

Issues:
1. Classification of service as Goods Transport Agency or supply of tangible goods service.
2. Application of extended time limit for demanding service tax.
3. Legal maintainability of show cause notices.

Classification of service as Goods Transport Agency or supply of tangible goods service:
The appellant, registered for providing transport of goods by road service and supply of tangible goods service, received show cause notices alleging non-payment of service tax for providing goods transport agency service. The appellant argued that they supplied heavy vehicles and cars, not goods transport agency service, and were eligible for small scale industries benefit. They cited a previous case where demand under GTA category was dropped. The Tribunal noted that the department was aware of the appellant's activities and found the show cause notices to be in violation of the limitation period. The Tribunal remanded the matter for re-adjudication.

Application of extended time limit for demanding service tax:
The Tribunal found that the show cause notices were hit by the limitation period as the appellant had been issued a previous notice which was adjudicated and dropped. The Tribunal criticized the department for re-issuing notices despite previous decisions. It emphasized the importance of respecting previous decisions and lack of justification for invoking the extended time proviso. The Tribunal highlighted the need for discipline in following appellate decisions and remanded the matters for re-adjudication.

Legal maintainability of show cause notices:
The Tribunal observed that the show cause notices were barred by limitation as previous issues had been decided and appealed. It noted that the Commissioner (Appeals) had not adequately considered the appellant's submissions and evidence. The Tribunal directed the Commissioner (Appeals) to re-adjudicate all three matters together, considering the classification of service and legal maintainability of the notices. The appeals were allowed by way of remand for further review.