2021 (7) TMI 1026 - AT - Service Tax

Classification of services - GTA services or not - appellant is transporter of timber/firewood for forest Department of Government of Madhya Pradesh - cartage Challan equivalent to the consignment note or not - period 2013-14 to 2015-2016 - HELD THAT - The carting Challan in this case is only for internal control of forest department. Such carting Challan is not equivalent to a consignment note which is issued by the transporter. The consignment note is a negotiable instrument and the transporter is bound to deliver the goods to bonafide holder of title, as mentioned in the consignment note. Such element of consignment note are absent in the carting Challan . The carting Challan is not equivalent to consignment note. Accordingly, the appellant has not rendered the services as per the definition of GTA under the Finance Act - appeal allowed - decided in favor of appellant.

Summary

Issues:
Taxability of services rendered by the appellant as a transporter of timber/firewood for the Forest Department of the Government of Madhya Pradesh under the category of Goods Transport Agency (G.T.A).

Analysis:
The appellant was engaged in transporting timber and other forest products, including loading and unloading charges, for the Forest Department. The Revenue contended that the services provided were taxable under G.T.A., leading to a show cause notice for Service Tax of &8377; 1,11,667. The demand was confirmed, along with penalties under different sections, by the Commissioner (Appeals).

The Commissioner (Appeals) upheld the demand, considering the cartage Challan issued by the Forest Department as equivalent to a consignment note. The appellant was held liable for service tax as the carting Challan was deemed to qualify for G.T.A. The Commissioner observed that the forest official issued the carting Challan, and the driver's acknowledgment was obtained, indicating a consignment-like process for transportation charges.

The appellant cited a precedent decision of the Tribunal in a similar case, arguing that the cartage Challan should not be considered equivalent to a consignment note. The Tribunal, after considering the arguments, found that the carting Challan was solely for internal control of the forest department and did not meet the criteria of a consignment note. As a consignment note is a negotiable instrument binding the transporter to deliver goods to the rightful holder, which was not the case with the carting Challan, the appellant's services did not fall under the definition of G.T.A.

Consequently, the Tribunal allowed the appeal, setting aside the impugned order. The appellant was granted consequential benefits as per the law.

This detailed analysis of the judgment highlights the key points of contention, arguments presented, and the Tribunal's decision regarding the taxability of the services provided by the appellant as a transporter for the Forest Department under the G.T.A. category.