2018 (11) TMI 235 - AT - Service Tax

Issuance of consignment notes - GTA Services - non-payment of service tax on transportation charges paid for procurement of husk - Whether any consignment notes were issued by individual transporters or otherwise? - Held that - In this particular case, a specific assertion has been made before this Bench in the grounds of appeal that no consignment notes were issued. It is also not clear from the Order-in-Original whether the consignment note was issued in this case or otherwise. If no consignment note is issued, the present case automatically gets excluded from the definition of GTA services by virtue of definition itself and no service tax is to be paid, else service tax is payable. This is a fit case to be remanded back to the original authority to examine whether any consignment notes by whatever name called, were issued by the truck operators - appeal allowed by way of remand.

Summary

Issues:
1. Liability to pay service tax on transportation charges for procurement of husk.
2. Applicability of exemption notification No. 34/2004-ST.
3. Whether individual truck/lorry owners are covered under the definition of Goods Transport Agency (GTA) operators.
4. Time limitation for demand.
5. Calculation errors in the show cause notice.

Analysis:

1. The appellant, a manufacturer of bulk drugs and Drug Intermediates, was issued a show cause notice for not paying service tax on transportation charges for procuring husk. The appellant argued that the suppliers paid for the transportation of husk, not them. They claimed exemption under notification No. 34/2004-ST as the amount charged per consignment did not exceed a certain limit. The Ld. Commissioner confirmed the demand, imposing penalties under sections 76, 77 & 78. The appellant contended that they used services of individual truck/lorry owners not issuing consignment notes, thus not falling under GTA operators' definition.

2. The Department argued that even individual truck owners are considered GTA operators, citing a case precedent. They disputed the appellant's eligibility for exemption under notification No. 34/2004-ST, stating that the exemption conditions were not met due to varying transport costs. They also alleged non-disclosure of husk procurement for evading service tax, justifying penalties under relevant sections of the Finance Act, 1994.

3. The Tribunal noted conflicting judgments on whether individual truck owners are covered under the GTA definition. While a High Court ruling broadened the definition to include individuals, the requirement of issuing consignment notes was not addressed. The Tribunal emphasized the importance of consignment notes in determining service tax liability. As no notes were issued in the present case, the matter was remanded to verify if any notes were issued by truck operators to decide the tax liability accordingly.

4. The Tribunal found merit in the appellant's argument regarding the absence of consignment notes and the consequent exclusion from GTA services. The case was remanded to the original authority for further examination. The appeal was allowed by remand, emphasizing the significance of consignment notes in determining service tax liability.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, relevant legal precedents, and the Tribunal's decision, ensuring a comprehensive understanding of the case.