2017 (3) TMI 1021 - AT - Service Tax

Classification of service - business of moving personal effects/household goods from one place to another place - GTA service or Cargo handling service? - Dispute is about the period prior to 01.01.2005 - Held that - The impugned services are appropriately taxable under GTA Service with effect from 01.01.2005 and no tax can be demanded for the period prior to 01.01.2005 under any other entry - There is no doubt that the activity of the appellants during the impugned period has been clarified by CBEC in Circular No. 104/7/2008-ST dated 06.08.2008, as GTA service only - demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues: Liability to discharge service tax on services provided by the appellant under Cargo Handling Services and classification under Goods Transport Agency (GTA) services.

Issue 1 - Liability to discharge service tax on services provided by the appellant:
The case involved a dispute regarding the liability to pay service tax on services provided by the appellant. The Department contended that the services were cargo handling services and thus subject to service tax. A demand of ?20,19,552/- along with interest and penalties under Sections 76, 77, and 78 of the Finance Act, 1994 was confirmed. The Commissioner (Appeals) acknowledged the liability but remanded the matter for re-computation. The appellant argued that their services should be classified under GTA services, emphasizing that their business primarily involved transporting personal effects/household goods. The appellant cited previous acceptance of their classification under "Transportation of Goods By Road" Service from 01.01.2005. The appellant also referred to a CBEC circular supporting their classification under GTA services. The Tribunal considered the arguments and the CBEC circular, ultimately ruling in favor of the appellant, holding that their activity fell under the category of GTA services. Consequently, the impugned order was set aside, and the appeal was allowed.

Issue 2 - Classification under Goods Transport Agency (GTA) services:
The second issue revolved around the classification of the appellant's services under GTA services. The appellant contended that their business of moving household goods aligned with the definition of GTA services and not cargo handling services as per Section 65(23) of the Finance Act, 1994. The appellant highlighted that the CBEC circular No. 104/7/2008-ST dated 06.08.2008 clarified the classification under GTA services. The Tribunal examined the circular and relevant case laws, including CCE Raipur Vs Drolia Electrosteels (P) Ltd, M/s R K Transport Company Vs CCE Raipur, and M/s Arjuna Carriers Pvt Ltd. Based on the circular and precedent, the Tribunal concluded that the appellant's activity fell under the category of GTA services. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential benefits as per law.

In conclusion, the Tribunal's judgment addressed the issues of liability to discharge service tax on the services provided by the appellant and the classification of those services under GTA services. The decision was based on a thorough analysis of the arguments presented by both parties, relevant legal provisions, and supporting circulars and case laws, ultimately ruling in favor of the appellant and setting aside the impugned order.