2018 (9) TMI 497 - AT - Service Tax

GTA Services - It has been the contention of the department that the appellant-assessee has not included the value of loading /unloading, and stacking charges in the service value of GTA service - CBEC circular No. 104/2007-2008 ST dated 6.8.2008 - short payment of tax - time limitation. Held that - The provisions of Circular No. 104/07/2008-ST dated 6.8.08 are relevant only in cases where the consolidated value of transportation charges is being recovered from the service recipient by the service provider. And the clarification is primarily with regard to whether abatement will be entitled on the full value of such charges i.e. transportation charges plus cargo handling, loading, / unloading, stacking /destacking charges etc. are also included. In this particular case, the contracts for transportation of fertilizers cargo filed by the appellant assessee, with regard to various transport contractor are very categorically having two parts, first, which is primarily for transportation of fertilizers; and second is for loading / unloading and stacking/ de-stacking of fertilizers and separate charges for each activity are indicated. Since the value of both the services have categorically been provided separately, the appellant assessee has discharged his service tax liability under reverse charge mechanism of transportation charges as is the requirement of Service tax law, we do not find any legally tenable ground to demand service tax on the cargo handling charges on which service tax as per the provisions of service tax law is to be discharged by the service provider i.e. various transport contractors - Since in the present case, the value has been indicated separately and there is no charge of the department that the service provider of the cargo handling service like loading /unloading stacking /destacking of fertilizer consignment has not discharged their service tax liability. It is seen that the department has not even tried to prove that there is short payment of service tax. We also find that since there is no charge of non-payment of service tax by the contractors of cargo handling services like loading / unloading etc. in that case they must have paid service tax on the full value of service and if same is added to the transportation charges, the appellant-assessee will be entitled for prescribed abatement and as a result the Department would get less amount of service tax - there is no merit in confirming short payment service tax. Time Limitation - Held that - Since the appellant assessee is being audited regularly by the Department and all the details have been in the knowledge of the department and the charge of suppression of facts or mis declaration etc. have not been established by the department., Therefore the demand of duty under section 73 (1) under extended time proviso is not sustainable on the ground of limitation in this case - demand is also barred by limitation. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the appellant-assessee correctly discharged service tax liability on loading/unloading and stacking charges in the GTA service value.
2. Whether the demand for short payment of service tax, penalty, and interest is justified.
3. Whether time-sensitive transportation of goods by road in a goods carriage by a GTA should be classified as courier service and not GTA service.

Analysis:
1. The appellant-assessee, engaged in fertilizer manufacture, registered under GTA service, discharged service tax on transportation charges under reverse charge mechanism. The department alleged non-inclusion of loading/unloading, stacking charges in service value. The department relied on CBEC circular, demanding ?57,21,856 for June 2008 to March 2012 under section 73(1) of Finance Act, 1994. The Commissioner confirmed the charges in the adjudication order.

2. The appellant contested the service tax levy on loading/unloading, stacking charges. They argued that they correctly discharged tax liability on transportation charges under reverse charge. The department cited circular clarifying GTA service classification for road transportation. The appellant asserted that loading/unloading, stacking charges were included where consolidated in transportation charges, citing invoices as evidence.

3. The appellant contended that the demand was time-barred as there was no intent to evade tax, with regular audits revealing all facts. The department argued for penalty under section 78 of Service Tax Act, 1994. The Tribunal heard both sides and found the circular applicable only when transportation charges were consolidated. As the appellant separately indicated charges for transportation and cargo handling, they fulfilled tax obligations. The Tribunal noted no evidence of non-payment by cargo handlers, thus rejecting the demand for short payment.

4. The Tribunal agreed that regular audits and lack of evidence for suppression or misdeclaration barred the demand under the extended time provision. Consequently, the demand was deemed barred by limitation, and the impugned order was set aside, allowing the appeal.