2018 (3) TMI 775 - AT - Service Tax

Reverse charge mechanism - liability of service tax - transport of goods by road services - centralized registration of all services - Held that - Sub-rule (4) provides for single application for all taxable services for purpose of registration - The appellant did not produce any evidence that they have opted for central registration in terms of rule 4(2) as they have centralized billing systems or centralized accounting system. No such application for central registration for service tax purpose have been placed on record. A simple letter stating about operational control for the convenience of the appellant does not satisfy the statutory requirement of central registration as per Rule 4. In the case GTA service, the levy of service tax had been shifted from the service provider to the service recipient who is liable to pay freight as cosigner or consignee of the goods. This applies to specified categories of service recipient. The appellant paid identified amount of freight for the transportation of goods. M/s Lee actually paid service freight charges in terms of the sub-contract executed by them. M/s Essemm dealt with the transportation of goods. Freight paid to the transporter is by M/s Lee as agent of the appellant, who reimbursed the same. The appellant is one of the categories specified for tax liability on reverse-charge basis. The freight is borne by the appellant. Though the arrangement is such that M/s NTPC imported the goods as per the contract, the appellant is in-charge of reaching the goods at site office and, thereafter, for further work - appellant liable to pay service tax. Appeal dismissed - decided against appellant.

Summary

Issues:
Service tax liability on reverse-charge basis for transport of goods by road services; Territorial jurisdiction of Commissioner of Central Excise, Raipur.

Analysis:
The appeal concerned the service tax liability of the appellant on reverse-charge basis for transport of goods by road services in connection with a Super Thermal Power Project. The dispute arose when the Revenue demanded service tax from the appellant, holding them liable for the transportation of goods. The Tribunal initially upheld the Revenue's decision, leading to the appellant filing an appeal before the High Court of Chhatisgarh. The High Court directed the Tribunal to consider the issue of territorial jurisdiction of the Commissioner, Raipur, which initiated the proceedings against the appellant. The appellant contended that the Commissioner at Raipur had no jurisdiction to issue the show cause notice as the appellant was registered with the Commissioner at Hyderabad. However, the Tribunal examined the documents provided by the appellant, which did not establish centralized registration for the disputed services. The Tribunal concluded that the proceedings initiated by the Commissioner at Raipur were not without jurisdiction.

Regarding the merits of the case, the appellant argued that they were not liable to pay service tax under reverse-charge as they did not engage a transport agency in the capacity of consignor or consignee. The appellant claimed that M/s Lee, who paid the freight charges, was not their agent, and the consignor and consignee were M/s NTPC as per the contractual arrangement. However, the Tribunal found that the appellant fell under the specified category for tax liability on reverse-charge basis. The freight was paid by the appellant through M/s Lee to the transporter, M/s Essemm, making the appellant liable for service tax. Despite the contractual arrangement with M/s NTPC, the appellant was responsible for the transportation of goods to the project site, justifying the service tax liability as determined by the original authority.

In conclusion, the Tribunal dismissed the appeal after considering both the jurisdictional issue and the merits of the case. The Tribunal upheld the original authority's decision on the appellant's service tax liability for the transport of goods by road services on a reverse-charge basis. The judgment was pronounced on 16.03.2018.