2024 (11) TMI 209 - AT - Service Tax

Service tax under reverse charge mechanism under Goods Transport Agency Service or otherwise - appellant as a recipient of transport service - As per Commisioner Appeals monthly bills raised by the truck owners are nothing but consignment notes and therefore the appellant is liable to pay service tax under reverse charge mechanism HELD THAT - We find that it is an admitted fact that in respect of the transport service provided by the truck owners no individual consignment note was issued for the transportation service. The service provider had issued monthly bill which Commissioner (Appeals) has considered as consignment note. We completely disagree with the learned Commissioner (Appeals) for the reason that the consignment note itself connotes that the document has to be issued for each and every consignment that means for every trip if a document is issued which contains all the information as required under the law irrespective of any nomenclature the same can be accepted as consignment note. However, in the present case the monthly bill raised for the collection of charges by the service provider was treated as consignment note by the Learned Commissioner (Appeals) which is absolutely incorrect. The monthly bill is not a document which is issued for each consignment moreover the bill does not contain all the information as required under the law. Therefore, the entire confirmation of demand by the learned Commissioner (Appeals) based on the monthly bill cannot be sustained. As relying on Nandganj Sihor Sugar Co. Ltd. 2014 (5) TMI 138 - CESTAT NEW DELHI and Ultra Tech Cement Ltd. 2017 (11) TMI 297 - CESTAT MUMBAI in the present case there is absolutely no issuance of consignment note in respect transport service provided by the truck owners. We also hold that the monthly bill in the present case cannot be treated as consignment note. Therefore in absence of consignment note, the demand under GTA is not sustainable. Assessee appeal allowed.

Summary

Issues Involved:
1. Whether the appellant is liable to pay service tax under the reverse charge mechanism for 'Goods Transport Agency Service' when no consignment note was issued by the truck owners.

Issue-wise Detailed Analysis:

1. Liability to Pay Service Tax under Reverse Charge Mechanism:

The central issue in this case is whether the appellant, as a recipient of transport service, is liable to pay service tax under the reverse charge mechanism when no consignment note was issued. The original authority had set aside the demand for service tax on the basis that no consignment note was issued by the truck owners. However, the Commissioner (Appeals) reversed this decision, considering the monthly bills raised by the truck owners as consignment notes, thus making the appellant liable for service tax.

The appellant argued that the transport service was provided by truck owners who explicitly declared on non-judicial stamp paper that they did not issue any consignment notes. The appellant maintained that service tax was discharged in cases where consignment notes were issued by a Goods Transport Agency (GTA). The appellant contended that the Commissioner (Appeals) erred in treating monthly bills as consignment notes, as these bills lacked the specific information required by law to qualify as consignment notes.

2. Definition and Requirement of Consignment Note:

The Tribunal examined the definition and requirements of a consignment note under Rule 4B of the Service Tax Rules, 1994. A consignment note must be issued by a goods transport agency and contain specific details such as the name of the consignor and consignee, registration number of the goods carriage, details of the goods transported, and the person liable for paying service tax. The Tribunal found that the monthly bills did not meet these criteria and could not be considered consignment notes.

The Tribunal referred to previous judgments, including Ultra Tech Cement Ltd. and Nandganj Sihor Sugar Co. Ltd., which established that the absence of a consignment note means that the service provided does not fall under the category of Goods Transport Agency services liable for service tax under the reverse charge mechanism. In these cases, the Tribunal held that without a consignment note, the transport service does not qualify as a taxable service provided by a Goods Transport Agency.

3. Precedent and Legal Interpretation:

The Tribunal emphasized that the interpretation by the lower authorities, which equated any document with a consignment note, was misplaced. The Tribunal reiterated that the issuance of a consignment note is a statutory requirement for a service to be classified under Goods Transport Agency services. The Tribunal's decision was guided by established legal precedents, which clarified that merely raising invoices for transportation does not satisfy the requirement of a consignment note.

Conclusion:

The Tribunal concluded that the Commissioner (Appeals) erred in treating monthly bills as consignment notes. Since no consignment notes were issued, the appellant was not liable to pay service tax under the reverse charge mechanism for the transport services provided by the truck owners. The Tribunal set aside the impugned order and allowed the appeal, reaffirming that the absence of a consignment note negates the service tax liability under the Goods Transport Agency services. The judgment was pronounced in the open court on 05.11.2024.