2018 (11) TMI 236 - AT - Service Tax

GTA service or not - transportation of sugar cane, gunny bales, machinery parts, urea, sulphur etc. - reverse charge mechanism - whether or not the appellant is liable to pay service tax on GTA services? - Held that - There is nothing on record to show that no consignment note was issued - Issue of consignment note is an essential requirement for levy of service tax on GTA services. Even in the grounds of appeal, there is nothing asserting that no consignment notes were issued in this particular case. Therefore, there is no reason to hold that service tax on GTA services is not payable in this case. As far as exemption notification 34/2004 is concerned, there is nothing on record to show that appellant is entitled to the benefit of this exemption notification. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Liability to pay service tax on GTA services.
2. Applicability of exemption notification 34/2004.

Analysis:
1. The appeal was filed against an Order-in-Appeal regarding the liability to pay service tax on Goods Transport Agency (GTA) services. The appellant, engaged in sugar and molasses manufacturing, availed GTA services for transportation but did not pay service tax. The appellant argued that private truck operators transporting cane are not GTAs and no service tax is due. They claimed not to incur transportation charges as cane growers deliver cane at the factory gate. However, records showed otherwise, indicating transportation charges incurred for various inputs. The appellant's contention that the charges were advances to cane growers was dismissed due to lack of evidence in accounts. The Tribunal ruled that individual truck owners can be considered GTAs, rejecting the appellant's arguments based on previous cases. The High Court precedent established that individual truck owners fall under the GTA definition, emphasizing the issuance of consignment notes as crucial for service tax levy. The absence of evidence regarding consignment notes in this case led to the rejection of the appeal. The Tribunal upheld the service tax liability on GTA services, dismissing the appellant's claims.

2. Regarding exemption notification 34/2004, the appellant failed to prove eligibility for the exemption as the transportation charges did not meet the threshold specified. The Tribunal found no evidence supporting the appellant's entitlement to the exemption. Consequently, the appellant's appeal based on exemption notification was rejected. The Tribunal upheld the lower authorities' decision, emphasizing the liability to pay service tax on GTA services and the inapplicability of the exemption notification. The judgment aligned with the High Court's interpretation of GTA services, emphasizing the broad definition encompassing individual truck owners. The Tribunal's decision, pronounced on 02.11.2018, rejected the appeal and upheld the impugned order, affirming the service tax liability on GTA services and dismissing the exemption claim.

This comprehensive analysis of the judgment highlights the key issues of liability for service tax on GTA services and the applicability of exemption notification 34/2004, providing a detailed overview of the Tribunal's decision and the legal interpretations involved.