2017 (4) TMI 283 - AT - Service Tax

Liability of service tax - transport of goods by road services - Revenue s case is that the sugar cane has been transported by Truck Operator Union from the collection center up to their factory and they have received transportation charges from the respondent therefore, in terms of Rule 2 (1) (d) (v) of the STR, 1994, the respondent is liable to pay service tax - Held that - the transportation of sugar cane to the factory of the appellant is the duty of the farmers who supplied the sugar cane at the collection center set up by the respondent. From the collection center, the sugar cane was supplied by Truck Operator Union. The Truck Operator Union is not a commercial concern therefore, the same is not covered under Goods Transport Agency, therefore, the provisions of Section 65(105)(zzp) are not applicable to the facts of the this case - appeal dismissed - decided against Revenue.

Summary

Issues: Appeal against demand of Service Tax on transport of goods by road services.

Analysis:
1. Facts of the Case: The appellant, a sugar and molasses manufacturer, was paying Service Tax till 31.03.2005 under Rule 2 (1) (d) (v) of the Service Tax Rules, 1994. Proceedings were initiated against the respondent for stopping the payment of Service Tax from 01.04.2005. The demand of Service Tax was confirmed but set aside by the Ld. Commissioner (Appeals), leading to the Revenue's appeal.

2. Contentions: The Revenue argued that the respondent is liable to pay service tax as they received transportation charges from the Truck Operator Union. The respondent's counsel opposed, stating that the Transport Union is not a Goods Transport Agency, relying on a precedent.

3. Legal Provisions: An amendment in Section 65(105)(zzp) of the Finance Act, 1994 defined taxable service by a Goods Transport Agency. The term "Goods Transport Agency" was defined under Section 65(50b).

4. Judicial Precedent: The Tribunal examined a similar issue in a previous case where it was held that transportation without issuance of consignment notes does not make the transporter a Goods Transport Agency, thus not liable for Service Tax.

5. Decision: The Tribunal found that the Truck Operator Union transporting sugar cane for the appellant is not a commercial concern and does not fall under Goods Transport Agency. Therefore, the provisions of Section 65(105)(zzp) are not applicable in this case.

6. Conclusion: The impugned order setting aside the demand for Service Tax was upheld, and the Revenue's appeal was dismissed.

This detailed analysis of the judgment highlights the key legal arguments, relevant provisions, and the Tribunal's reasoning in deciding the appeal against the demand of Service Tax on transport of goods by road services.