2025 (4) TMI 817 - AT - Service Tax

Refund of the amounts paid as service tax under reverse charge mechanism (RCM) - transportation charges paid to individual goods carriage/truck owners who do not issue any consignment note by whatever name called - HELD THAT - It is well settled that there is a distinction between an individual truck owner or the operator and agency in order to establish that the services of individual truck owners hired by the Appellant are not liable to service tax under the category of Goods Transport Agency (GTA) in terms of Section 65(50b) read with Section 65(105)(zzp) of the Finance Act 1994. Further the individual truck owners have not issued any consignment note by whatever name called. Conclusion - The appellant s payment of service tax on transportation charges to individual truck owners was not warranted under the definition of goods transport agency services as no consignment notes were issued. Appeal allowed.

The core issue addressed in the appeals is whether the appellant is entitled to a refund of service tax paid under the reverse charge mechanism on transportation charges paid to individual goods carriage/truck owners who do not issue consignment notes. The appellant argued that the service tax was paid by mistake, as these individual truck owners do not qualify as 'goods transport agencies' (GTA) under the relevant provisions of the Finance Act, 1994.

The relevant legal framework involves the interpretation of Section 65(50b) and Section 65(105)(zzp) of the Finance Act, 1994, which define 'goods transport agency' and the taxable service provided by such agencies. The appellant contended that the transportation services in question do not fall within this definition, as no consignment notes were issued by the individual truck owners.

The appellant relied on several precedents, including decisions from various High Courts and the Tribunal, which distinguished between individual truck owners and 'goods transport agencies.' Notably, the appellant cited the Karnataka High Court's decision in CCE Vs. M/s. Motorola Ltd., where it was held that excess amounts paid by mistake are not subject to the time bar under Section 11B of the Central Excise Act, 1944, thus allowing for refunds.

The appellant also referenced the Negative List of Services effective from 01.07.2012, particularly Section 66D(p) of the Finance Act, 1994, which exempts transportation of goods by road from service tax, except when provided by a 'goods transportation agency' or 'courier agency.'

The Tribunal considered the appellant's arguments and the evidence presented, including cash payment vouchers issued to individual truck owners, which did not indicate any service tax component. The Tribunal noted that the service tax liability could not be imposed under the reverse charge mechanism without the issuance of consignment notes, as supported by the Tribunal's decision in Bhoramdeo Sahakari Shakhar Utpadam Karkhana Vs. Commissioner of Customs, Central Excise & Service Tax, Raipur.

The Tribunal rejected the Revenue's argument that individual operators fall within the definition of 'commercial concern' under Section 65(50b) of the Finance Act, 1994, as this interpretation was deemed irrelevant to the appellant's case due to legislative changes replacing 'commercial concern' with 'any person.'

The Tribunal concluded that the appellant's payment of service tax on transportation charges to individual truck owners was not warranted under the definition of 'goods transport agency' services, as no consignment notes were issued. Consequently, the Tribunal allowed the appeals, granting the appellant a refund of the service tax paid, with consequential relief in accordance with the law.

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