2016 (11) TMI 938 - AT - Service Tax

Service Tax liability - Goods Transport Agency Services - delivery of food grains as per direction of the District Supply Officer/District Collector, Latur, under P.D.S. scheme - Held that - respondent issues periodical bill and it is not consignment note or billtees which is primary requirement to classify the activity under Goods Transport Agency as a taxable service. We perused the sample copy of invoice issued by respondent and found that these invoices are in form No. 2, a form prescribed by Government of Maharashtra, by any stretch of imagination cannot be considered as consignment note. This factual matrix is not contested by the Revenue in ground of appeal. The issue is now squarely covered by the judgments of the Tribunal Nandaganj Sihori Sugar Co. Ltd. Vs. CCE, Lucknow 2014 (5) TMI 138 - CESTAT NEW DELHI - the impugned order is correct, legal and does not suffer from any infirmity. The appeal filed by the Revenue is rejected and cross objection filed by the respondent being in support of the impugned order is also disposed of.

Summary

Issues Involved:
Revenue's appeal against Order-in-Appeal on Service Tax liability for a transporter of food grains under Goods Transport Agency Services.

Analysis:
1. Issue of Service Tax Liability: The Revenue contended that the respondent, a transporter of food grains, should be liable for Service Tax under "Goods Transport Agency Services." However, the first appellate authority ruled in favor of the respondent, considering them as a truck owner exempt from Service Tax. The Revenue argued that the respondent falls under the definition of Goods Transport Agency under the Finance Act, 1994. The Tribunal found no merit in the Revenue's appeal.

2. Nature of Activity: The respondent delivers food grains as per the direction of the District Supply Officer under the P.D.S. scheme. The Revenue's claim that the respondent issued consignment notes was deemed unsustainable. The Tribunal noted that the respondent issues periodical bills, not consignment notes, which are essential for classifying the activity as a taxable service. The invoices issued by the respondent, in form No. 2 prescribed by the Government of Maharashtra, were not considered as consignment notes. The Revenue did not contest this factual aspect.

3. Precedents and Tribunal Judgments: The Tribunal cited several judgments, including Western Coal Fields Ltd. Vs. CCE, Nandaganj Sihori Sugar Co. Ltd. Vs. CCE, and others, which support the respondent's position. The Tribunal concluded that these judgments covered the issue in favor of the respondent, affirming the correctness and legality of the impugned order. Consequently, the Revenue's appeal was rejected, and the respondent's cross objection in support of the impugned order was also disposed of.

This detailed analysis of the legal judgment highlights the key issues involved, the arguments presented by both parties, and the Tribunal's reasoning in arriving at the decision.