2018 (1) TMI 981 - AT - Service Tax

Classification of services - transportation service charged Service Tax in the invoice under the category of Goods Transport Agency Services - The case of the Department is that the service provider by the appellant is not classifiable under GTA services but correctly classifiable under Clearing and Forwarding Agency Services - Held that - on identical issue of the appellant itself, Gupta Coal India Ltd Versus Commissioner of Central Excise, Nagpur 2017 (10) TMI 289 - CESTAT MUMBAI , where the entire facts and the contract is same in that case. In the present case, only difference is of the period, in the earlier Tribunal s order period was 2005-06 to 2009-10 and in the present case period is 2010-11, where it was held that It would appear that transportation is the most prominent of these and the classification that was declared by the appellant cannot be faulted for its legality. More so, as the impugned order has failed to consider such an option. Nay, even the show cause notice is regrettably bereft of such a scrutiny. The activity of the appellant is not classifiable as clearing and forwarding agents service and the demand on that head must fail. Appeal allowed.

Summary

Issues:
Classification of services under Goods Transport Agency Services or Clearing and Forwarding Agency Services for the period 2010-11.

Analysis:
The case involved a dispute regarding the classification of services provided by the appellant to M/s Grasim Industries Ltd. The appellant was engaged to lift beneficiated coal from M/s BLA Industries Pvt. Ltd. and transport it to GIL's Birlagram Plant. The appellant charged Service Tax under Goods Transport Agency Services with a 75% abatement, while the Department contended that the services should be classified as Clearing and Forwarding Agency Services. The demand raised was for Service Tax of ?1,57,998 for the period 2010-11. The Commissioner (Appeals) upheld the demand, leading to the appeal before the Tribunal.

The appellant argued that in a previous case for the period 2005-06 to 2009-10, the Tribunal had classified similar services as GTA and not Clearing and Forwarding Agency Services, leading to the demand being dropped. The appellant relied on various judgments to support their claim. The Revenue, represented by the Assistant Commissioner, reiterated the findings of the impugned order.

Upon careful consideration, the Tribunal noted that in the previous case, the Tribunal had already decided in favor of the appellant on the identical issue. The Tribunal referred to the earlier order which highlighted the responsibilities of the appellant and the nature of services provided. The Tribunal emphasized that the activity of the appellant did not fall under Clearing and Forwarding Agency Services but rather under Goods Transport Agency Services. The Tribunal also pointed out deficiencies in the impugned order and the lack of consideration for the principles guiding the classification of composite services.

Consequently, the Tribunal set aside the demand arising from the re-classification of services and remanded the remaining portion of the impugned order to the original authority for further determination. The Tribunal followed the ratio of the earlier Division Bench Order and allowed the appeal in favor of the appellant. The judgment was pronounced on 18.01.2018.