2022 (9) TMI 799 - AT - Service Tax

Levy of Service tax - GTA Services - Demand on the ground that appellant has not submitted any documentary evidence to establish which truck/ vehicle was used for providing the taxable service - extended period of limitation - HELD THAT - It is not the case of the department that appellant was also registered as the Goods Transport Agency. Thus, it becomes clear that the appellant was an individual who was the owner of the trucks and was in the business of giving them on rent to goods transport agency. As is apparent from the definition of taxable service of Goods Transport Agency that the taxability does not at all arise on an individual. Goods Transport Agency means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called; Thus, it can be seen that issuance of a consignment note is the sine-qua-non for a supplier of service to be considered as a Goods Transport Agency. It makes clear that tax liability under this heading does not arise against the individual person who owns the truck. It also becomes clear that the agency who is providing service of Goods Transport Agency is not required to be the owner of vehicle which are to be used by such agencies for transportation of the goods. Mega exemption of 20.06.12 clarifies that truck can be taken on hire by the GTA and in that case, the truck owner is exempted from any service tax liability. Hence the demand confirmed with respect to the amount received against the truck on hire, is also held to not to be sustainable, as such, is liable to be set aside. Time Limitation - HELD THAT - Vide the Show Cause Notice of the year 2020, the demand for the period October, 2014 to June, 2017 has been proposed to be regular. The show cause notice is apparently beyond the normal period of limitation. I do not find any positive evidence nor any specific allegation in the show cause notice about any malafide intent of the appellant to evade the payment of service tax liability. Accordingly, it is held that the Department has wrongly invoked the extended period of limitation. Thus, it becomes clear that the demand against the appellant has wrongly been confirmed by the Adjudicating Authority below. He is held to have no service tax liability - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Appellant's liability for service tax on transportation services provided.
2. Applicability of Mega Exemption Notification No. 25/2012-ST.
3. Absence of documentary evidence and its impact on the case.
4. Interpretation of the definition of "Goods Transport Agency" and tax liability.

Analysis:

1. The appeal challenged the order proposing recovery of Service Tax, interest, and penalty from the appellant for providing transportation services without paying the service tax. The appellant argued that as an individual truck owner, they were not liable for service tax under Goods Transport Agency (GTA) services. The Department initiated an inquiry based on information received from the Income Tax authority regarding the collection of amounts without paying service tax. The appellant contended that the amounts received were for truck rent from registered GTA firms, exempted under Mega Exemption Notification No. 25/2012-ST.

2. The appellant's submissions highlighted the exemption under the Mega Notification for giving vehicles on hire to GTA. The Commissioner (Appeals) acknowledged that the amounts received were for truck rent from registered GTA firms, exempting the appellant from service tax liability. The appellant's argument was supported by Entry No. 22(b) of the Mega Exemption Notification, which exempts services of giving on hire to GTA, clarifying the non-taxable nature of the transactions.

3. The Departmental Representative rebutted the appellant's submissions, emphasizing the lack of documentary evidence submitted by the appellant. However, the Tribunal noted that the appellant had provided Registration Certificates of the trucks, establishing ownership and rental transactions with registered GTA firms. The Tribunal concluded that documentary evidence was not necessary to prove the transactions exempted under the Mega Notification, as the nature of the transactions was evident from the facts presented.

4. The Tribunal analyzed the definition of Goods Transport Agency and clarified that tax liability does not arise against individual truck owners providing vehicles on hire to GTA. The issuance of a consignment note is crucial for a service provider to be considered a GTA. The Tribunal referred to a similar case where the exemption under the Mega Notification was upheld for an individual owning trucks, reaffirming that the appellant, as a truck owner, was not covered under the tax liability scope.

5. Additionally, the Tribunal found the Department's invocation of the extended period of limitation beyond the normal period unjustified, as there was no evidence of malafide intent by the appellant. Citing a Supreme Court decision, the Tribunal held that positive evidence beyond mere inaction is required to extend the limitation period. Consequently, the Tribunal set aside the order confirming the demand, ruling in favor of the appellant and allowing the appeal.

This detailed analysis of the judgment highlights the legal intricacies involved in determining the appellant's liability for service tax and the application of relevant exemptions under the Mega Notification, ultimately leading to the Tribunal's decision to set aside the order and allow the appeal.