2018 (4) TMI 839 - AT - Service Tax

GTA service - reverse charge mechanism - For transporting paddy/rice the appellants engaged various trucks and entered into agreement for such arrangement with the truck owners - Held that - One of the essential ingredients of existence of consignment note is missing. The arrangement in the present case for transport of the food grains cannot be brought under GTA service for tax liability on the part of the appellant on reverse charge basis - Further, the truck owners provided the trucks and did not act as transport agent - demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Liability to pay service tax on reverse charge basis for transport of food grains under GTA service.
2. Contesting the demand based on absence of consignment note or equivalent document.
3. Appellant's status as a Government Co-operative Society and contesting the demand for extended period and penalties.
4. Dispute over whether truck owners are transport agents and fulfillment of conditions for tax liability under GTA service.
5. Examination of the arrangement and documents to determine the applicability of GTA service.

Analysis:

1. The appellant, a Co-operative Society involved in food grain procurement and transport, contested the demand for service tax on reverse charge basis for transport of food grains under GTA service. The appellant argued that they hired lorries from individual truck owners and paid transport charges based on kilometers traveled, without issuance of consignment notes. The absence of consignment notes or equivalent documents was highlighted as a key point in disputing the tax liability under GTA service.

2. The appellant emphasized their role as a Government Co-operative Society implementing government policies for food grain transport, denying any intention to evade taxes. They challenged the demand for an extended period and penalties, asserting their compliance with regulations and lack of fraudulent intent.

3. The Revenue contended that the truck owners were transport agents and that the transport arrangements fulfilled the conditions for tax liability under GTA service. They argued that the bills issued by transporters contained necessary details equivalent to consignment notes, justifying the tax liability on the appellant.

4. The Tribunal examined the details provided by both parties, including agreements, bills, and the nature of the transport arrangements. It was noted that the appellant engaged lorries for transporting their goods as both consignor and consignee, with no evidence of consignment notes due to the continuous nature of the transport agreements.

5. After thorough consideration, the Tribunal found that the absence of consignment notes and the continuous transport arrangements with individual truck owners did not align with the requirements for tax liability under GTA service. The Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal based on the lack of essential elements for tax liability under GTA service on a reverse charge basis.

This detailed analysis of the judgment showcases the key arguments, evidence presented, and the Tribunal's decision regarding the liability for service tax on the transport of food grains under GTA service.