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2024 (1) TMI 721 - AT - Service TaxLevy of Service Tax - amount of freight paid by them to tractor trolley owners, who did not issue any LR and transported the goods in such tractor trolley for the appellant - HELD THAT - The facts are not under dispute that the service of transportation was provided by tractor trolley owners themselves and no transport agency is involved. Freight of the transportation was paid by the appellant to such tractor trolley owner for the transportation of goods i.e. Gas cylinder, no LR/consignment note was issued. In this case even though the transportation activity is involved but the criteria for classifying a transport service under GTA are not fulfilled. Such as no consignment note/LR was issued and the transportation was provided by not the goods transport agency but individual tractor trolley owners Therefore, the service does not fall under the definition of GTA service. Accordingly, in our considered view the same is not taxable in the hands of the appellant. In the case of LAKSHMINARAYANA MINING CO. VERSUS COMMR. OF ST., BANGALORE 2009 (9) TMI 71 - CESTAT, BANGALORE Bangalore Tribunal has held that In the absence of a finding that the appellants had received the service of transport of goods from any GTA, the impugned demand of Service tax, and penalties are liable to be set aside. Thus, it is categorically held that in case transportation made by vehicle operator (in the present case tractor trolley owners) and no consignment note was issued, the service cannot be held as goods transport agency service liable to Service Tax. Therefore, the impugned order is not sustainable. The impugned order is set aside - Appeal is allowed.
Issues Involved:
1. Liability of Service Tax on freight paid to tractor trolley owners. Summary: 1. Liability of Service Tax on Freight Paid to Tractor Trolley Owners: The primary issue in this case is whether the appellant is liable to pay Service Tax on the amount of freight paid to tractor trolley owners who did not issue any LR/consignment notes and transported goods for the appellant. 1.1 Facts of the Case: The appellant, engaged in the production and clearance of industrial gases, availed GTA services and paid Service Tax under the Reverse Charge Mechanism. They also used private tractor owners for local transportation of goods. The department contended that the appellant should pay Service Tax under the reverse charge mechanism on the freight paid to these tractor trolley owners. 1.2 Appellant's Argument: The appellant argued that the transportation service was availed directly from individual tractor trolley owners, who did not issue LRs/consignment notes and were primarily engaged in agricultural activities. Therefore, the service does not fall under the 'goods transport agency service' and should not be liable to Service Tax. The appellant relied on several judgments and CBIC Circular No. 95/6/2007-ST dated 11.06.07 to support their claim. 1.3 Respondent's Argument: The respondent reiterated the findings of the impugned order, asserting that the appellant is liable to pay Service Tax on the freight paid to the tractor trolley owners. 1.4 Tribunal's Findings: Upon careful consideration, the Tribunal found that the transportation service was provided by individual tractor trolley owners without issuing any consignment notes. Therefore, the service does not meet the criteria for classification under GTA as defined in Section 65(50b) and Section 65(105)(zzp) of the Finance Act, 1994. The Tribunal referred to several judgments, including Lakshminarayana Mining Co. and Bharat Swabhiman, which established that the issuance of consignment notes is a non-derogable requirement for a service to be classified as GTA. 1.5 Conclusion: The Tribunal concluded that since no consignment notes were issued and the service was provided by individual tractor trolley owners, it does not fall under the definition of GTA service. Therefore, the appellant is not liable to pay Service Tax on the freight paid to these tractor trolley owners. The impugned order was set aside, and the appeal was allowed. Final Decision: The appeal was allowed, and the impugned order was set aside, as pronounced in the open court on 22.09.2023.
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