2020 (1) TMI 590 - AT - Service Tax

Non-payment of service tax - GTA services or not - appellants were allegedly availing the services of Goods Transport Agency for transporting iron ore by road in a goods carriage - extended period of limitation - HELD THAT - The appellants have availed the transport services for transporting their minerals from transport owners/operators - Further, in the present case, the Revenue has not been able to establish that the consignment note was issued by Goods Transport Agency. Though, the Commissioner (A) in the impugned order has mentioned that consignment note was issued - If we see the definition of Goods Transport Agency , it clearly shows that the services must be provided by a person in relation to transport of goods by road and issues consignment note, by whatever name called whereas in the present case, we find that no consignment note was issued. In the case of South Eastern Coalfields Ltd. 2016 (8) TMI 677 - CESTAT NEW DELHI , after considering the definition of Goods Transport Agency as provided in Section 65(50b) and after considering the various decisions given by the Tribunal, has allowed the appeal of the assessee by holding that the tax liability under Goods Transport Agency service cannot be sustained. Time limitation - HELD THAT - The extended period has wrongly been invoked in the present case because the appellant has not suppressed the material fact from the Department as the Department was aware of all the information and moreover, the issue was highly contentious and there were contrary decisions during the relevant time and the appellant had a bona fide belief that they are not liable to pay Service Tax as they have engaged the truck operators for carrying their goods by road. Appeal is allowed on merits as well as on limitation.

Issues Involved:

1. Liability to pay Service Tax under Goods Transport Agency (GTA) services.
2. Issuance of consignment note by the transporter.
3. Invocation of the extended period of limitation.
4. Suppression of facts by the appellant.

Detailed Analysis:

1. Liability to Pay Service Tax Under GTA Services:
The core issue revolves around whether the appellants are liable to pay Service Tax under the category of Goods Transport Agency (GTA) services. The appellants argued that they availed services from individual truck owners/operators, who are outside the purview of Service Tax as per the definition under Section 65(50b) of the Finance Act, 1994. They contended that Service Tax is applicable only when services are provided by a Goods Transport Agency, which involves issuing a consignment note. The Tribunal noted that the consignment note is a crucial element for the applicability of Service Tax under GTA services. The Tribunal referenced multiple decisions, including Lakshminarayana Mining Co Vs CCE and Bhima Sahakari Sakhar Karkhana Ltd. Vs CCE, which consistently held that individual truck owners/operators are not liable for Service Tax under GTA if no consignment note is issued.

2. Issuance of Consignment Note by the Transporter:
The Tribunal examined whether consignment notes were issued by the transporters. It was found that the Revenue failed to establish the issuance of consignment notes by the Goods Transport Agency. The definition of "Goods Transport Agency" under Section 65(50b) requires the issuance of a consignment note for the service to be taxable. The Tribunal emphasized that mere transportation of goods by road without issuing a consignment note does not attract Service Tax under GTA. This position was upheld in several decisions, including South Eastern Coalfields Ltd. Vs CCE, where the absence of consignment notes meant that the tax liability under GTA did not arise.

3. Invocation of the Extended Period of Limitation:
The appellants argued that the demand was time-barred since the Show Cause Notice (SCN) was issued on 03.08.2007 for the period from 01.01.2005 to 19.02.2005. The Tribunal found that the Department invoked the extended period of limitation without proper justification. The appellants had not suppressed any material facts, and the Department was already aware of the relevant information due to previous investigations. The Tribunal referenced decisions such as Jaiprakash Industries Ltd. Vs CCE and Kiran Ispat Udyog Vs CCE, which held that the extended period cannot be invoked in cases involving interpretation issues and divergent views.

4. Suppression of Facts by the Appellant:
The Department alleged that the appellants suppressed information, justifying the extended period of limitation. However, the Tribunal found no evidence of suppression. The appellants had disclosed all relevant facts, and the Department had prior knowledge of the transactions through investigations in similar cases. The Tribunal concluded that the appellants had a bona fide belief that they were not liable to pay Service Tax as they engaged individual truck operators, not a Goods Transport Agency.

Conclusion:
The Tribunal concluded that the appellants were not liable to pay Service Tax under GTA services as no consignment notes were issued. The demand was also time-barred, and there was no suppression of facts by the appellants. The impugned order was set aside, and the appeal was allowed on both merits and limitation grounds. The Tribunal's decision was pronounced in the open court on 10th January 2020.

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