2019 (5) TMI 1407 - AT - Service Tax

CENVAT Credit - GTA Services - period 01.01.2005 to 30.11.2005 - HELD THAT - There is no dispute that appellant are truck owner and they received amount of freight from the Goods Transport Agency who arrange the transportation for consignor or consignee. The appellant did not issue any consignment note. Admittedly the consignment notes were issued by the Transport Agency M/s. Shri Balaji Transport Company M/s. New Sharma Transport Company etc. In these facts the appellant did not qualify as Goods Transport Agency and service tax demanded under Goods Transport Agency service is not legal and proper - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appellant engaged in the manufacture of unbranded chewing tobacco; Service tax registration under Goods Transport Agency category; Non-payment of service tax on freight charges collected for the period 01.01.2005 to 30.11.2005; Dispute over classification as Goods Transport Agency; Interpretation of relevant legal provisions and case laws.

Analysis:
The Appellate Tribunal CESTAT Ahmedabad heard the case where the appellant, involved in manufacturing unbranded chewing tobacco, had obtained service tax registration under the Goods Transport Agency category but had not paid service tax on freight charges collected for a specific period. The audit revealed the discrepancy, leading to a show cause notice and subsequent demand confirmation. The Commissioner (Appeals) upheld the demand, prompting the appellant to appeal the decision.

During the proceedings, the appellant's representative, a Chartered Accountant, argued that the appellant was not a Goods Transport Agency but a truck owner who received freight amounts from entities like M/s. Shri Balaji Transport Company and M/s. New Sharma Transport Company for providing trucks. The appellant did not issue consignment notes, and therefore, did not meet the criteria to be classified as a Goods Transport Agency. The representative cited various judgments to support this argument, emphasizing that the demand under the GTA service was not valid.

On the other hand, the Revenue's representative reiterated the findings of the impugned order, maintaining the stance taken earlier. After hearing both sides and examining the facts, the Tribunal found that the appellant, as a truck owner, received freight amounts from Goods Transport Agencies arranging transportation for consignors or consignees. Since the appellant did not issue consignment notes and the actual transport agencies issued them, the Tribunal concluded that the appellant did not qualify as a Goods Transport Agency. Consequently, the demand for service tax under the Goods Transport Agency service was deemed incorrect, leading to the setting aside of the impugned order and allowing the appeal.

In conclusion, the Tribunal's decision clarified the classification issue, emphasizing the distinction between a truck owner and a Goods Transport Agency based on the specific roles and responsibilities in the transportation process. The judgment highlighted the importance of meeting the criteria outlined in relevant legal provisions and previous case laws to determine the correct tax liability in such situations.