2017 (11) TMI 1106 - AT - Service Tax

GTA service - non-payment of service tax - reverse charge mechanism - Held that - The liability to pay Service Tax is very much linked with the status of the truck owners, as claimed by the assessee-Appellants - However, it is clear that the assessee-Appellants have to establish the status of such truck owners as not belonging to transport agency which is liable to Service Tax. Since this aspect could not be examined by the original authority, matters needs reexamination - appeal allowed by way of remand.

Summary

Issues:
Service Tax liability under "Goods Transport Agency Services" - Proper computation of tax liability - Non-payment of tax by individual truck owners - Limitation on demands - Closure of case under Section 73(3) - Maintainability of demand for extended period - Imposition of penalties.

Analysis:
The judgment pertains to two interconnected appeals filed by the assessee-Appellants against Orders-in-Original passed by the Commissioner of Service Tax, New Delhi, regarding Service Tax liability under "Goods Transport Agency Services." The assessee-Appellants, engaged in construction activities, were procuring materials from suppliers, including M/s JMD Building Material Suppliers. The Revenue initiated proceedings against them for non-payment of Service Tax under reverse charge basis. The original authority confirmed the tax liability and imposed penalties.

The learned counsel for the assessee-Appellants contended that the tax liability was not computed correctly as many service providers were individual truck owners not liable to pay tax under the category of "Goods Transport Agency." They also raised objections on limitation and emphasized the closure of the case under Section 73(3) and non-maintainability of demands for the extended period. The counsel sought to submit on the merit of the demands, which was a legal issue mainly concerning the grievance of the assessee-Appellants.

The Revenue's representative objected to the submissions, arguing that the assessee-Appellants did not raise any merit-related issues before the lower authorities. They opposed the plea for additional grounds before the Tribunal, stating it would complicate the verification of facts. The Revenue emphasized that the demands against the two appellants were for different activities and that the burden of proof regarding the status of service providers rested on the assessee-Appellants.

After hearing both parties and examining the record, the Tribunal allowed the submission on merit by the assessee-Appellants, noting the potential variation in tax liability based on the status of service providers. The Tribunal directed a fresh consideration by the original authority on various merit and limitation points raised by the appellants. The judgment clarified that no opinion on the case's merits was expressed, and the decision would depend on the documentary and other evidence submitted by the assessee-Appellants during the fresh proceedings.

Consequently, the Tribunal set aside the impugned orders and remanded the matter to the original authority for reevaluation. Both appeals by the assessee-Appellants were allowed by way of remand, without expressing any opinion on the case's merits, to be decided based on the evidence presented during the fresh consideration.