2023 (4) TMI 971 - AT - Service Tax

Levy of Service tax - GTA service or not - hiring tankers on monthly basis - no consignment notes issued - HELD THAT - It is not in dispute that the appellants are paying fixed tanker hiring charges on monthly basis. The appellant appellants are paying in addition to the fixed hiring charges, a certain amount for each kilometre run as well as the toll tax paid by the vehicles - the transporter is taking the entire responsibility of the goods for the route and transporter is not issuing any LRs for the purpose of these goods. The appellants are issuing delivery challans. From the above background, it is apparent that no consignment notes are issued by Girish Logistics, i.e. the supplier of vehicles. Since no consignment notes are issued to transporter no GTA service has been provided. The demand is set aside - appeal allowed.

Summary

Issues involved: Appeal against demand of service tax u/s goods transport agent service.

Details of the Judgment:

Issue 1: Service Tax Demand
The appeal was filed against the demand of service tax under the category of goods transport agent service. The appellant contended that they were not receiving any goods transport agent service as they were hiring tankers on a monthly basis. The appellant argued that since no service of goods transport agent was involved, no service tax should have been imposed. The appellant also highlighted that they were bearing the cost of toll charges and a certain amount for each kilometer run of the vehicles. The appellant claimed that the entire credit of cenvat for the so-called goods transport agent service should be available to them.

Issue 2: Tribunal's Analysis
The Tribunal considered the submissions from both sides. It was noted that the appellants were paying fixed tanker hiring charges on a monthly basis, along with additional charges for each kilometer run and toll taxes. The contract between the parties showed that the transporter took full responsibility for the goods during transportation and did not issue any consignment notes. Instead, the appellants issued delivery challans. As no consignment notes were issued by the transporter, the Tribunal concluded that no goods transport agent service was provided. Therefore, the demand for service tax was set aside, and the appeal was allowed.

This judgment clarifies the criteria for determining the applicability of service tax under the goods transport agent service category, emphasizing the importance of consignment notes in establishing the provision of such services.