2018 (7) TMI 860 - AT - Service Tax

Goods Transport Agency service - freight charges paid by the appellant for transport of marble slabs from the mines to the appellant s factory - Reverse Charge Mechanism - the individual truck owners do not issue any invoice/ document/ consignment note for transport of such marble blocks. The only document which is generated by the appellant by way of debits notes indicating the freight paid for such transport. Whether the appellant is liable to pay service tax by considering such debit notes as consignment notes? - Held that - The issue which stands settled in the various case laws cited by the appellant is that as long as no consignment note is issued in terms of Rule 4B of the Service Tax Rules, 1994 by the transporter, the service tax liability under the category of GTA service does not arise - There is no dispute in the facts of the present case that the individual truck owners do not issue any consignment notes. The debit notes issued by the appellant indicating the freight payable cannot be considered as a consignment note as per Rule 4B ibid. The liability for payment of service tax under GTA cannot be sustained against the appellant in the absence of consignment notes - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Liability of payment of service tax under the category of Goods Transport Agency (GTA) services based on freight charges paid for transport of marble slabs from mines to the factory.

Analysis:
1. Facts and Background: The appellant, engaged in manufacturing marble slabs and tiles, faced a dispute regarding the payment of service tax on freight charges paid for transporting marble slabs from mines to the factory. The Department claimed the appellant was liable to pay service tax under the category of GTA services on a reverse charge basis.

2. Appellant's Arguments: The appellant contended that the transportation was carried out through individual truck owners who did not issue consignment notes. They paid freight in cash and issued debit notes, which they argued should not be considered consignment notes, thus absolving them of service tax liability.

3. Revenue's Arguments: The Revenue supported the impugned order, citing case laws where service tax liability was upheld in similar situations involving individual truck owners transporting goods.

4. Judgment: The Tribunal analyzed the case laws presented by both sides. It noted that the absence of consignment notes from the individual truck owners meant that the service tax liability under the GTA category did not arise. The Tribunal distinguished the case law cited by the Revenue, stating it was not applicable to the present case.

5. Conclusion: Considering the absence of consignment notes and the legal precedents, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeals. The judgment emphasized that the liability for service tax under GTA could not be sustained without consignment notes, as per Rule 4B of the Service Tax Rules, 1994.