2024 (5) TMI 274 - AT - Service Tax

Levy of service tax under Reverse Charge Mechanism (RCM) - GTA service - no consignment note issued - HELD THAT - The issue is no longer res integra and has been consistently decided in favour of the assessee by the various co-ordinate Benches of the Tribunal - Reliance can be placed in the case of CHARTERED LOGISTICS LIMITED VERSUS C.C.E. -AHMEDABAD-II 2023 (7) TMI 883 - CESTAT AHMEDABAD where it was held that it is settled that a person even if provides Goods Transportation service but if he does not issue Consignment Notes/LR he cannot be brought under the ambit of GTA. Thus the settled principle of law is that even if a person has provided goods transport service but has not issued the consignment note service tax from that person cannot be recovered under the category of GTA. The case of the appellant is on the same footing as he availed the services of individual transporters and truck owners and in the absence of issuing the consignment note the appellant cannot be made liable to pay service tax under the category of GTA. There are no reason to sustain the impugned order and the same is accordingly set aside - appeal allowed.

Summary

Issues:
The issues involved in the judgment are the liability to pay service tax under Reverse Charge Mechanism (RCM) under 'Goods Transport Agency' (GTA) for the appellants, namely M/s Vaishnav Marbles Pvt. Ltd., M/s Sai Nath Natural Stones, and Lalit Marmo & Granites.

Issue 1:
The appellants contended that they availed the services of transport operator and not of transport agency for inward transportation of raw material/goods to their factory, and therefore, the services rendered by Goods Transport Operator do not fall under the category of Goods Transport Agency. They argued that individual transporters or truck owners are not covered under GTA service, and the recipient is not liable to pay service tax under Reverse Charge Mechanism.

Issue 2:
The period covered in the appeals relates to both pre-negative era and the post negative era w.e.f. 1.07.2012. The relevant provisions for the period prior to 1.07.2012 are Section 65(50b) and 65(105)(ZZP) of the Finance Act, 1994, which defines the 'Goods Transport Agency' and the 'Taxable Service'. The new Section 65B (26) of the Finance Act came into existence with effect from 01.07.2012, deferring GTA.

Issue 3:
The issue in the present appeal pertains to service tax liability under 'Goods Transport Agency' where no consignment note is issued. The Tribunal referred to various decisions where it was consistently held that if a person has provided goods transport service but has not issued the consignment note, service tax cannot be recovered under the category of GTA. The case of the appellant was on the same footing as they availed the services of individual transporters and truck owners, and in the absence of issuing the consignment note, they cannot be made liable to pay service tax under the category of GTA.

In conclusion, the Tribunal set aside the impugned order and allowed all three appeals, stating that the settled principle of law is that without the issuance of a consignment note, service tax under the category of GTA cannot be recovered.