2024 (2) TMI 501 - AT - Service Tax

Taxability - Classification of services - Goods Transport Agency Services or not - consignment note were not issued - providing services by way of Transportation of Food Grains from various godowns to the individual PDS Shop and/or other destination contained in such contract/agreements - HELD THAT - Undisputedly, in the present case appellant was not issuing any consignment note which is an essential requirement for classification of their services under the category of GTA. This fact about not issuance of consignment note is not disputed by the revenue that being so the services provided by the appellant cannot be classifiable under the category of GTA services for making the demand of service tax. Adjudicating authority in the impugned referred to ceratin documents which though were not consignment note etc., to hold that these documents are consignment notes. In case of The Ramco Cements Limited 2023 (9) TMI 1257 - CESTAT CHENNAI Chennai Bench has held that we find that the other orders relied upon by the Ld. Consultant clearly confirm the view that the essential requirement is the issuance of consignment note in order to be covered under the definition of GTA and in the absence of the same, the transporters/contractors rendering transport services in mines cannot be said to be GTA and therefore, their service cannot be made amenable to the levy of Service Tax under the category of transportation of goods by road service. There are no merits in the impugned order and the same is set aside - appeal allowed.

Summary

Issues Involved:
1. Taxability and classification of services.
2. Issuance of show cause notice within the period of limitation.
3. Maintainability of service tax demand and justification for penalties.

Summary:

1. Taxability and Classification of Services:
The primary issue was whether the services provided by the appellant fell under "Transportation of Goods by Road Service" and were subject to service tax. The adjudicating authority concluded that the services were indeed classifiable under "Goods Transport Agency Service" (GTA) as the appellant provided transportation of food grains from various godowns to individual PDS shops, as per the agreement with the Regional Food Controller (RFC). The appellant contested this classification, arguing that they merely provided trucks and did not issue consignment notes, which are essential for GTA classification. The adjudicating authority, however, interpreted the transport challans and invoices as consignment notes, thereby classifying the services under GTA.

2. Issuance of Show Cause Notice within the Period of Limitation:
The show cause notice was issued on 12.04.2013 for the period from 2007-2008 to 2009-2010. The appellant argued that the notice was time-barred. However, the adjudicating authority did not find merit in this argument and proceeded with the demand.

3. Maintainability of Service Tax Demand and Justification for Penalties:
The adjudicating authority confirmed the demand of Rs. 61,94,880/- along with interest and imposed various penalties under Sections 76, 77, and 78 of the Finance Act, 1994. The appellant contended that they were not liable for service tax as they did not issue consignment notes and were not a GTA. The tribunal found that the appellant was not issuing consignment notes, a crucial requirement for GTA classification. Therefore, the services provided could not be classified under GTA services. The tribunal cited several judicial precedents, including decisions by CESTAT and the Hon'ble High Court, which supported the view that the absence of consignment notes excluded the services from GTA classification.

Conclusion:
The tribunal concluded that the appellant's services could not be classified under GTA due to the absence of consignment notes. Consequently, the demand for service tax and the associated penalties were not sustainable. The appeal was allowed, and the impugned order was set aside.