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2017 (11) TMI 297 - AT - Service TaxGTA services - reverse charge mechanism - consignment note - case of appellant is that the service provider have not issued any consignment note and hence they will not be covered under the scope of Goods transport Agency - Held that - reliance placed in the appellant s own case M/s Ultratech Cement Ltd. Versus Commissioner of Central Excise Kohlapur 2017 (3) TMI 1155 - CESTAT MUMBAI where it was held that 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. The Appellant in respect of service in question are not liable to service tax - appeal allowed - decided in favor of appellant.
Issues:
Service Tax liability on transport of goods by road under reverse charge mechanism. Analysis: The case involved the Appellant engaging with transport agencies for transporting clinker, their raw material, to their factory premises. The Show Cause Notice alleged that the Appellant failed to include the value of these services in their ST-3 returns and pay Service Tax for the period Jan 2010 to Jan 2011. The Adjudicating Authority confirmed the demand of Service Tax and imposed penalties under the Finance Act, 1994. The Appellant, aggrieved by the Order-in-Original, filed an appeal before the Commissioner (Appeals), which was rejected, leading them to appeal before the Tribunal. The Appellant argued that the service providers did not issue consignment notes, thus not falling under the Goods Transport Agency category. They referenced a previous tribunal decision in their own case where a similar service was held not taxable under the Reverse Charge Mechanism. Additionally, the Appellant contended that the service was received by individual truck owners not covered by Goods Transport Agency, citing various judgments to support their claim. They also highlighted that the transporter charges per trip were below the exempted threshold according to a specific notification, further asserting that the service in question was not liable to Service Tax. The Appellant further argued that the activities were more aligned with Cargo Handling Service rather than Goods Transport Agency services, thus negating the liability to pay Service Tax under reverse charge mechanism. They emphasized that if Service Tax was payable on Goods Transport Agency services, the amount would be available as cenvat credit, resulting in a revenue-neutral scenario. The Appellant also contended that the issue at hand revolved around the interpretation of statutory provisions, making the imposition of penalties unwarranted. The Revenue, represented by an Assistant Commissioner, reiterated the findings of the impugned order. The Tribunal, after considering the submissions from both sides, referred to a previous tribunal decision in the Appellant's own case where it was held that the service in question was not liable to Service Tax. The Tribunal highlighted that the transporting companies did not issue consignment notes as required by Rule 4B of the Service Tax Rules, thus not meeting the criteria to be classified as Goods Transport Agency services. The Tribunal concluded that the impugned order was unsustainable and set it aside, allowing the appeal in favor of the Appellant. The judgment was pronounced in court on 18/10/2017.
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