2018 (8) TMI 21 - AT - Service Tax

Liability of service tax - transportation of sugarcane from Sugarcane Collection Center to Sugar Factory - GTA Service or not - Held that - The issue herein is no more res-integra and the same is squarely covered by the precedent decision of this Tribunal in the case of M/s Nandganj Sihori Sugar Co. Ltd. Vs Commissioner of Central Excise, Lucknow 2014 (5) TMI 138 - CESTAT NEW DELHI wherein this Tribunal under similar circumstances has held that service tax under the said circumstances is not liable to be paid by sugar mills - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Request for adjournment by the appellant.
2. Demand of service tax on transportation of sugarcane from Sugarcane Collection Center to Sugar Factory.

Analysis:
1. The appellant requested an adjournment, which was refused by the tribunal. The learned A.R. for revenue informed that the issue pertained to the demand of service tax on the transportation of sugarcane from the Sugarcane Collection Center to the Sugar Factory. The tribunal proceeded with the hearing after denying the adjournment request made by the appellant.

2. The tribunal examined the facts of the case, noting that the appellant arranged for the collection of sugarcane at collection centers, and it was the farmers' responsibility to transport the sugarcane to the sugar mill. The Sugarcane Collection Centers were established to facilitate farmers, and the sugarcane was transported from these centers to the sugar factory by trucks. The expenses for transportation were recovered on a per-ton basis from the farmers. The service tax was demanded based on these recoveries from the farmers. The tribunal referred to a precedent decision in the case of M/s Nandganj Sihori Sugar Co. Ltd. Vs Commissioner of Central Excise, Lucknow, where it was held that service tax under similar circumstances is not liable to be paid by sugar mills.

3. The tribunal concluded that the issue was no more res-integra and was squarely covered by the precedent decision of the tribunal in the mentioned case. Following the precedent decision, the tribunal set aside the impugned order and allowed the appeal filed by the appellant with consequential relief, as per law.