2009 (12) TMI 193 - AT - Service Tax

Transport of goods by road services- Notification No. 32/2004-ST- The appellants herein paid service tax and education cess on the amount of freight charges paid to transporters from 1-1-2005. They filed a claim of refund of Rs. 71,543 covering the period from 1-1-2005 to 31-10-2005 on the ground that they were eligible to abatement of 75 per cent in terms of Notification No. 32/2004-ST, dated 3-12-2004 and were therefore, entitled to refund of excess paid. They also filed consolidated declaration in terms of the notification, from the transport agencies month-wise, stating that they had neither taken credit on inputs or capital goods nor availed the benefits under Notification No. 12/03-ST, dated 20-6-2003, which was the requirement of Notification No. 32/04. The claim was rejected on the ground that declarations by the Goods Transport Agencies providing transport service was not made by the appellants as required under Board s Circular dated 27-7-2005 and further, on the ground that there was no mention of the name of the agencies except lorry numbers and date in the vouchers raised by the factory and no reference to the appellants by name, in the consolidated declaration. The Commissioner (Appeals) upheld the adjudication order. In the light of the decision of CCE&C v. Kanaka Durga Agro Oil Products (P.) Ltd. 2009 -TMI - 34581 - CESTAT, BANGLORE, held that- The authorities below had no occasion to consider the applicability of the above case law. I, therefore, set aside the impugned order and remit the case to the adjudicating authority for fresh decision in the light of the Tribunal s order.

Summary

Issues:
Claim of refund of service tax and education cess on freight charges paid to transporters - Applicability of Notification No. 32/2004-ST - Rejection of claim based on lack of declarations by Goods Transport Agencies - Interpretation of "Goods Transport Agency" - Liability to service tax on payments to individual transporters - Applicability of Tribunal's decision in CCE&C v. Kanaka Durga Agro Oil Products (P.) Ltd.

Analysis:
The appellants paid service tax and education cess on freight charges to transporters from 1-1-2005 and sought a refund under Notification No. 32/2004-ST, claiming 75% abatement. The claim was rejected due to inadequate declarations by Goods Transport Agencies and lack of specific mention of the agencies in the vouchers. The Commissioner (Appeals) upheld the rejection, stating that liability to service tax applies even when payments are made to individual transporters, considering them as "Goods Transport Agency."

Upon hearing both sides, the Tribunal referred to a previous decision in CCE&C v. Kanaka Durga Agro Oil Products (P.) Ltd., which held that service tax liability does not arise for services provided by individual truck owners. The Tribunal set aside the order and remitted the case for fresh consideration by the adjudicating authority in line with the precedent.

The appellants were granted the opportunity to present all available arguments, including the acceptance of the consolidated declaration and the provision of necessary particulars by individual operators if required. The Tribunal emphasized that fresh orders should be issued after allowing the appellants a fair hearing to present their defense.

In conclusion, the appeal was allowed for remand, providing the appellants with the chance to address all relevant issues and present their case before a new decision is made by the adjudicating authority.