2010 (3) TMI 520 - AT - Service Tax

Transport of goods - The assessee was receiving the services of goods transport agency s service, paid service tax under protest. Later, it had filed a refund claim contending that it was not required to pay service tax as the services of goods transport operators used by it did not fall under taxable category goods transport agency for the reason that the transporter had not issued to it consignment note or invoice or bill and that the operators issued only vouchers in respect of transport charges. The adjudicating authority rejected the refund claim. Held that - since assessee was receiving servies of goods transport agecy and had also complied with condition as recipient of service rendered by goods transport agency, it was liable to pay service tax. Thus the matter remanded for the limited purpose of quantification of the service tax liability after allowing 75 percent abatement.

Summary

Issues:
Service tax liability on the appellant as a recipient of services rendered by goods transport agency.

Analysis:
The appellant, a trader in various goods, filed a refund claim for service tax paid under protest, arguing that the services of goods transport operators used by them do not fall under the taxable category of goods transport agency. The appellant claimed that as they did not receive consignment notes, invoices, or bills from the transporters, the services were not taxable. However, the department issued a notice stating that the appellant, registered under the category of "Goods Transport Agency," was liable to pay service tax on freight amounts paid for transportation of goods by road. The adjudicating authority rejected the refund claim, which was upheld by the learned Commissioner (Appeals), leading to this appeal.

The issue revolved around the service tax liability on the appellant as a recipient of services from goods transport agencies. The Tribunal noted that the appellant was receiving services from goods transport agencies and was indeed a recipient of these taxable services. The argument that they were not recipients of such services was deemed meritless. The definition of taxable services included services provided to customers of goods transport agencies related to the transport of goods, making such services taxable in the recipient's hands. The Tribunal also reviewed previous decisions cited by the appellant but found them inapplicable to the current case due to differing facts. However, the appellant was deemed eligible for a 75% abatement of the service tax liability related to goods transport agency services, based on various judicial pronouncements. The Tribunal upheld the service tax liability on the appellant under the goods transport agency category and remanded the matter for quantification of the tax liability after allowing the abatement, emphasizing adherence to principles of natural justice in the further proceedings.

In conclusion, the Tribunal upheld the service tax liability on the appellant as a recipient of services from goods transport agencies. The appellant was found eligible for a 75% abatement of the service tax liability for goods transport agency services. The matter was remanded to the adjudicating authority for quantification of the tax liability following the abatement, with instructions to ensure procedural fairness. The appeal was disposed of accordingly.