2017 (11) TMI 694 - AT - Service Tax

GTA Service - demand is assessed on the premise that the appellant(s) received transport of goods by road service, defined in Section 65(50a) and (50b) read with Section 65(105) (zzp) - Held that - The definition of Goods Transport Agency in Section 65(50b) clearly specifies that Goods Transport Agency means any person who provides services in relation to transport of goods by road and issues a consignment note by whatever name called. The Explanation under Rule 4B of the Service Tax Rules, 1994 clarifies that consignment note is a document, issued by a Goods Transport Agency against the receipt of goods for the purpose of transport of goods in a goods carriage and contains other specified details - Clearly, as no consignment note, as generally understood or delineated in Rule 4B was issued by the transporters to the appellant, in the transactions in issue, the classification by the impugned order that appellant received transportation of goods by road service, is unsustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against demand of Service Tax for transport of goods by road services without consignment notes.

Analysis:
The judgment pertains to two appeals challenging the demand of Service Tax on the transport of goods by road services without consignment notes. The appellant, a coal mining company, engaged transporters to move coal from the mine to the stockyards and then to the handling plant. The impugned order confirmed the demand of Service Tax based on the premise that the appellant received transport of goods by road services. The key issue revolved around the absence of consignment notes in the transactions.

The definition of "Goods Transport Agency" under Section 65(50b) explicitly requires the issuance of a consignment note for services related to transport of goods by road. The Explanation under Rule 4B of the Service Tax Rules further clarifies the nature of a consignment note as a document issued by a Goods Transport Agency against the receipt of goods for transportation. In this case, it was established that no consignment notes were issued by the transporters to the appellant during the transactions in question.

The appellant contended that the absence of consignment notes meant that the activity fell outside the scope of transport of goods by road services. The Tribunal agreed with this argument, emphasizing that the classification by the impugned order was unsustainable due to the lack of consignment notes as required by law. Consequently, the impugned order confirming the demand of Service Tax was quashed, and the appeal was allowed with no costs incurred by the appellant.

In conclusion, the Tribunal's decision highlighted the significance of compliance with legal requirements, such as the issuance of consignment notes, in determining the applicability of Service Tax on transport services. The judgment serves as a reminder of the importance of adhering to statutory provisions and documentation standards in taxation matters related to the transport of goods by road services.