2017 (9) TMI 711 - AT - Service Tax

Liability of tax - freight - appellant availed the services of Goods Transport Operators for inward transportation of marble blocks from mines area to their factory - whether the appellant is liable to pay service tax on freight? - Held that - similar issue decided in the case of M/s. Nandganj Sihori Sugar Co. Versus CCE. Lucknow 2014 (5) TMI 138 - CESTAT NEW DELHI , where it was 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), and hence there will be no Service Tax liability on the appellant sugarcane mills, as they have not received the service from a Goods Transport Agency. As the appellants were not required to issue consignment note as per Rule 4(B) of the STR, 1994, they are not liable to pay service tax - appeal allowed - decided in favor of appellant.

Summary

Issues:
Service tax liability on the appellant as a service receiver for availing transportation services of marble blocks without paying service tax.

Analysis:
The appeal was filed against the impugned Orders-in-Appeal where the appellant was found not paying service tax on transportation services of marble blocks. The Revenue contended that as a registered company under the Companies Act, the appellant fell under Rule 2(1)(d)(v) of Service Tax Rules, 1994, making them liable to pay service tax. The impugned order demanded a specific amount as service tax with interest and penalties. The appellant argued that the transportation was not by goods transport agency but individual truck operators, hence no service tax was due. Several case laws were cited to support this argument.

The Tribunal analyzed the case in light of previous judgments and highlighted the definition of taxable service under Section 65(105)(zzp) and the requirements for a service to be provided by a Goods Transport Agency. It was noted that a Goods Transport Agency must issue a consignment note as per Rule 4B of the Service Tax Rules, which was not done in this case. The Tribunal emphasized that transportation without the issuance of consignment notes or other required documents does not fall under the service of a Goods Transport Agency. Therefore, the service tax liability on the appellant was deemed not applicable based on the cited judgments.

In conclusion, the Tribunal, following the precedent set by the co-ordinate Bench decision, set aside the impugned order and allowed the appeal. The pronouncement was made in the open court on a specific date.