2025 (4) TMI 106 - AT - Service Tax

Levy of service tax under the category of Transport of Goods by Road (G.T.A) service - all the consignments of goods consigned by the appellant were only to one individual consignee - applicability for exemption under N/N. 34/2004-ST dated 03.12.2004 - failure to disclose full/true and correct information of the value of the service - invocation of extended period of limitation - HELD THAT - It is submitted that in the instant case that the M.S. Racks were consigned to one consignee M/s Delta Power Solutions Limited located 2-3 Kms from the appellant s unit - It has also been submitted by the Learned AR that the appellant merely submitted a consolidated cash/credit memo issued by the GTA but no copy of bill issued by GTA was issued - The decisions of this Tribunal in the case of M/s Lal Traders Agencies 2022 (5) TMI 426 - CESTAT KOLKATA relying on the decision in the case of Chattisgarh Distilleries 2017 (11) TMI 344 - CESTAT NEW DELHI also noted. In the absence of any evidence to arrive at any decision on the availability of the exemption it is constrained to remand this case to the original authority to examine the eligibility of the exemption as mentioned to the appellant. The appellant may place all relevant documents to bolster his contentions. The appeal is allowed by way of remand.

ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment include:

Whether the appellant, M/s Precitech Enclosures Systems Pvt. Ltd, is liable to pay service tax under the category of Transport of Goods by Road (G.T.A) for the period from 27.12.2010 to 31.03.2015.
Whether the appellant is eligible for exemption under Notification No. 34/2004-ST, dated 03.12.2004, and subsequent notifications, based on the freight charges per consignment.
Whether the extended period of limitation was rightly invoked by the department for non-disclosure of complete information by the appellant.
Whether the imposition of penalties under Sections 77 and 78 of the Finance Act, 1994, was justified.

ISSUE-WISE DETAILED ANALYSIS

1. Liability to Pay Service Tax under G.T.A

Legal Framework: The relevant provisions of the Finance Act, 1994, including Sections 66, 67, 68, 69, and 70, were considered. The appellant was alleged to have contravened these provisions by not paying service tax on freight charges exceeding Rs. 750 per consignment.
Court's Interpretation: The Tribunal examined whether the appellant's consignments were subject to service tax based on the gross amount charged per consignment.
Key Evidence: The department relied on audit findings and specific freight bills to allege non-payment of service tax. The appellant argued that freight charges were below the exemption threshold.
Application of Law to Facts: The Tribunal noted discrepancies in the appellant's records and the absence of individual freight bills issued by the GTA.
Conclusion: The Tribunal remanded the case for further examination of the appellant's eligibility for exemption under the relevant notifications.

2. Eligibility for Exemption under Notification No. 34/2004-ST

Legal Framework: Notification No. 34/2004-ST and subsequent amendments were analyzed to determine the conditions under which exemptions from service tax are applicable.
Court's Interpretation: The Tribunal interpreted the notification clauses, distinguishing between exemptions for multiple consignments and individual consignments.
Key Evidence: The appellant's claim of exemption was based on freight charges per trip being below Rs. 1,500 for multiple consignments or Rs. 750 for individual consignments.
Application of Law to Facts: The Tribunal found insufficient evidence to support the appellant's claim of exemption and noted the need for further documentation.
Conclusion: The Tribunal remanded the case to the original authority to verify the appellant's eligibility for exemption, allowing the appellant to present additional evidence.

3. Invocation of Extended Period of Limitation

Legal Framework: Section 73 of the Finance Act, 1994, was considered regarding the extended period of limitation for service tax demands.
Court's Interpretation: The Tribunal considered whether the appellant had suppressed material facts with the intent to evade tax.
Key Evidence: The department argued that the appellant failed to disclose complete information, justifying the extended period.
Conclusion: The Tribunal did not make a definitive ruling on this issue, as the case was remanded for further examination.

4. Imposition of Penalties under Sections 77 and 78

Legal Framework: Sections 77 and 78 of the Finance Act, 1994, were examined regarding penalties for non-compliance and evasion.
Court's Interpretation: The Tribunal considered whether the appellant's actions constituted willful suppression or evasion.
Key Evidence: The department cited the appellant's failure to register for service tax and maintain proper records as grounds for penalties.
Conclusion: The Tribunal did not conclusively address the penalties due to the remand for further fact-finding.

SIGNIFICANT HOLDINGS

Exemption Interpretation: "A bare perusal makes it abundantly clear that clause (i) of the Notification talks about consignments, meaning several consignments to be transported in one single trip. Clause (ii) talks about individual consignment transported in one single trip."
Remand for Further Examination: The Tribunal remanded the case to the original authority to determine the appellant's eligibility for exemption, allowing for the submission of additional evidence.
Final Determination: The appeal was allowed by way of remand, with the Tribunal directing the original authority to re-examine the facts and the applicability of exemptions.