2022 (9) TMI 435 - AT - Service Tax

Classification of services - Transportation of Goods by Road (GTA) Services or otherwise - Respondent coal companies are availing transportation services at their mines - reverse charge mechanism - HELD THAT - The issue is no longer res-integra inasmuch as the same has been decided by this Tribunal in the case of SOUTH EASTERN COAL FIELDS LTD. VERSUS C.C.E., RAIPUR 2016 (8) TMI 677 - CESTAT NEW DELHI , wherein it has been held that the transportation services cannot be classified under GTA services where the consignment notes are not issued by the transporters. The issue has also been examined in detail in the case of M/S. MAHANADI COALFIELDS LTD. VERSUS COMMR. OF CENTRAL EXCISE SERVICE TAX, BBSR-I 2019 (7) TMI 1803 - CESTAT KOLKATA where it was held that the essential requirement of issuance of consignment note , in order to attract the definition of Goods Transport Agency , we hold that the transport contractors rendering the coal transportation services in mines cannot be said to be Goods Transport Agency and therefore, their services cannot be made amendable to levy of service tax in the category of transportation of goods by road services . The findings made by the Ld. Commissioner cannot be interfered with and hence, the demand has been rightly dropped in the impugned adjudication orders - the instant appeals filed by the Revenue are rejected.

Summary

Issues involved:
Revenue's appeal against setting aside of Service Tax demand under 'Transportation of Goods by Road (GTA) Services' for the period from January 2005-March 2009 due to non-issuance of consignment notes by transporters.

Analysis:

1. Issue of Classification of Services: The primary issue in this case revolves around the classification of transportation services availed by coal companies at their mines under 'GTA Services'. The Ld. Commissioner set aside the demand of Service Tax on the basis that no consignment notes were being issued by the transporters to the service recipient, i.e., the coal companies. This decision was challenged by the Revenue through three appeals.

2. Legal Precedents and Tribunal Decisions: The Tribunal referred to previous judgments to support its decision. Notably, the Tribunal cited the case of South Eastern Coalfields Limited vs. Commr, C. EX, Raipur, where it was held that transportation services cannot be classified under GTA services if consignment notes are not issued by the transporters. Additionally, the Tribunal mentioned the case of Mahanadi Coalfields Limited Vs. Commr, C. EX & S.T., BBSR-1, emphasizing the necessity of consignment notes for determining the taxability of transportation services.

3. Essential Requirement of Consignment Note: The Tribunal highlighted the significance of consignment notes in establishing a party as a 'Goods Transport Agency'. It reiterated that the issuance of consignment notes is a crucial factor in determining the taxability of services provided by transport contractors. The Tribunal's decision was supported by the observation that the transportation of goods by road is not directly taxed, but rather the services rendered by a goods transport agency, with the consignment note being a pivotal element.

4. Decision and Disposal of Appeals: After thorough analysis and consideration of legal precedents, the Tribunal concluded that the findings made by the Ld. Commissioner were appropriate. Consequently, the demand for Service Tax, interest, and penalty was set aside. The Tribunal rejected the appeals filed by the Revenue and disposed of the Cross Objections filed by the Respondent M/s. Bharat Coking Coal Limited against the Service Tax Appeals.

In conclusion, the Tribunal's judgment upheld the importance of consignment notes in determining the taxability of transportation services under 'GTA Services'. The decision was based on legal precedents and established principles regarding the classification of services, ultimately leading to the rejection of the Revenue's appeals and the setting aside of the Service Tax demand.