2024 (2) TMI 615 - AT - Service Tax

Recovery of the Service Tax alongwith interest and penalty - appellant had not discharged service tax on Goods Transport Agency (GTA) services under Rule 2(1)(d)(v) of Service Tax Rules, 1994 even though being the consignor of the goods - HELD THAT - A person who provides service in relation to transport of goods and issues consignment note could be called as goods transport agency and the service provided by him is Goods Transport Agency (GTA) service. Undisputedly in the present case, the appellant had hired autorickshaws, tempos, trucks for transportation of the goods from their factory to the customers premises. The said hired transporters have not issued consignment notes to the appellants but transported the goods on cash basis being small consignments. In those cases where consignment note has been issued viz., by M/s. Speedway against 5 bills, the appellant had conceded the liability of Rs.5,603/-. Since the amendment has enlarged the scope of consignment note and the said amendment is applicable prospectively, therefore, the judgment cited by the learned Authorised Representative for the Revenue is not applicable to the facts of the present case. On the other hand, the judgments cited by the learned advocate in Ultra Tech Cement Ltd. vs. CCE, Kolhapur 2017 (11) TMI 297 - CESTAT MUMBAI and the Board Circular No.104/7/2008-ST dated 6.8.2008 are squarely applicable to the period of dispute. The impugned order is modified to the extent of upholding demand of Rs.5,603/- along with interest and penalty under Section 78 of the Finance Act, 1994; and the order confirming the balance amount of demand with interest and penalty imposed under Section 77 of the Finance Act, 1994 cannot be sustained, accordingly set aside - Appeal allowed in part.

Summary

Issues involved:
The appeal involves the issue of liability to pay service tax on Goods Transport Agency (GTA) services under Rule 2(1)(d)(v) of Service Tax Rules, 1994, specifically focusing on the issuance of consignment notes and the applicability of relevant legal provisions.

Facts of the case:
The appellant, engaged in the manufacture of excisable goods falling under Chapter 83 of Central Excise Tariff Act, 1985, did not discharge service tax on GTA services during the period from 1.1.2005 to 31.03.2007. A show-cause notice was issued for recovery of service tax, interest, and penalty. The appellant contended that service tax was not liable on transportation services of small consignments where consignment notes were not issued. The Revenue, however, argued that service tax was required to be paid on GTA services irrespective of consignment notes being issued.

Arguments presented:
The appellant argued that service tax was not applicable to transportation services where consignment notes were not issued, citing relevant judgments and circulars. The Revenue, on the other hand, maintained that service tax was mandatory on GTA services regardless of consignment notes, referring to legal precedents supporting their stance.

Judgment and analysis:
The Tribunal analyzed the definition of a goods transport agency under Section 65(50b) and noted that a person providing transport services and issuing consignment notes could be classified as a GTA. It was observed that the hired transporters in this case did not issue consignment notes for small consignments, except in one instance where liability was admitted by the appellant. The Tribunal distinguished the applicability of legal provisions based on the timing of the amendment to Section 65(50b), concluding that the judgments and circular cited by the appellant were relevant to the period in question.

Decision:
The Tribunal modified the impugned order, upholding a demand of Rs.5,603 along with interest and penalty, while setting aside the balance amount of demand with interest and penalty. The appeal was partially allowed based on the above terms, considering the specific circumstances and legal interpretations presented during the proceedings.