2016 (9) TMI 736 - AT - Service Tax

Taxability of GTA services - no consignment notes were being issued - reverse charge - Rule 2(1)(d)(v) of Service Tax Rules, 1994 - Held that - When the transports did not issue consignment notes or GRs or Challans or any documents containing the particular as prescribed in Explanation to Rule 4B of the Service Tax Rules, 1994, the Transporters cannot be called Goods Transport Agency and, hence, in these cases, the service of transportation of sugarcane provided by the transporters would not be covered by Section 65(105)(zzp). In view of this we hold that there will be no Service Tax liability on the appellant sugarcane mills, as they have not received the service from a Goods Transport Agency. Liability does not arise on the sugar factory. - Decision in the case of Nandganj Sihori Sugar Co. Ltd. 2014 (5) TMI 138 - CESTAT NEW DELHI followed - Demand set aside - Decided in favor of assessee.

Summary

Issues involved:
Service tax liability on the appellant under reverse charge mechanism for transportation services provided by Jai Bhavani Serva Seva Sangh (JBSSS) without issuing consignment notes.

Analysis:
The appeal challenged an Order-in-Original regarding the service tax liability on the appellant under reverse charge mechanism for transportation services provided by JBSSS without issuing consignment notes. The revenue contended that the appellant, a sugar factory, was liable to pay tax as a recipient of services from a Goods Transport Agency (GTA). However, the appellant argued that since JBSSS did not issue consignment notes, they were not a GTA, and thus, no tax liability arose. The lower authority ruled against the appellant, confirming tax dues, interest, and penalties.

The appellant's counsel relied on precedents, including the cases of Nandganj Sihori Sugar Co. Ltd. and Bhima S.S.K. Ltd., where similar issues were settled in favor of the appellants. The Tribunal's decision in these cases established that the non-issuance of consignment notes by the transporters exempted the appellants from service tax liability as recipients of GTA services. The revenue reiterated the adjudicating authority's findings, emphasizing the appellant's tax liability as a recipient of GTA services.

After considering both sides' submissions and reviewing the records, the Tribunal examined the taxability of the GTA services received by the appellant from JBSSS. It was noted that JBSSS did not issue consignment notes to the appellant, aligning with the precedents cited by the appellant's counsel. The Tribunal referenced the detailed analysis from the Nandganj Sihori Sugar Co. Ltd. case, emphasizing the necessity of consignment notes for determining GTA services and service tax liability. The Tribunal concluded that since JBSSS did not issue consignment notes, the appellant was not liable to pay service tax as a recipient of GTA services.

Based on the settled legal principles and precedents, the Tribunal set aside the impugned order, allowing the appeal with consequential relief. The judgment highlighted the importance of consignment notes in determining GTA services and service tax liability, ultimately ruling in favor of the appellant due to the absence of consignment notes issued by JBSSS.