2017 (3) TMI 1155 - AT - Service Tax

GTA service - reverse charge mechanism - whether the appellant being a limited company is required to discharge service tax liability for the period 01.01.2005 to 31.12.2009 in respect of amounts paid by them to two transport companies for movement of material i.e. clinker from their own jetty to the cement manufacturing premises? - Held that - consignment note should have specific particulars the provisions of Section 65(50b) talks about the issuance of the consignment note - consignment note is misplaced as in this case the transporting companies have only raised invoices for transportation of cement clinkers as per the contract which did not satisfy the requirement of the consignment note and the responsibility cast for issuing the consignment note is not met to hold that Goods Transport Agency Services are rendered - demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Whether the appellant is required to discharge service tax liability for the period 01.01.2005 to 31.12.2009 in respect of amounts paid to transport companies for movement of material.

Analysis:
The appeal concerned the service tax liability of the appellant for payments made to transport companies for moving clinker from their jetty to the manufacturing premises. The lower authorities concluded that the services fell under 'Goods Transport Agency' (GTA) category, necessitating service tax under reverse charge mechanism. The appellant argued that the transport companies did not issue consignment notes as required by Rule 4B of Service Tax Rules, 1994. The appellant relied on the definition of 'consignment note' and a tribunal decision to support their position.

The Revenue reiterated that the services provided by the transport companies constituted GTA services, emphasizing that the movement of clinkers was not disputed. They contended that any document recording the movement of goods sufficed as a consignment note, contrary to the appellant's argument based on Rule 4B.

The Tribunal found errors in the lower authorities' conclusion on service tax liability. It noted that the transport companies did not issue consignment notes for the clinker transportation. The Tribunal emphasized the specific requirements of a consignment note as per Rule 4B, highlighting that mere invoices did not meet these requirements. Referring to a previous case, the Tribunal clarified that transportation without proper consignment notes did not constitute GTA services. Consequently, the impugned order was set aside, and the appeal was allowed.

In summary, the Tribunal ruled in favor of the appellant, holding that the transport of clinkers did not attract service tax liability under GTA services due to the absence of proper consignment notes. The decision was based on a detailed analysis of Rule 4B requirements and a precedent establishing the necessity of compliant consignment notes for service tax liability.