2018 (5) TMI 1131 - AT - Service Tax

Liability of service tax - GTA Service - consignment notes - whether the respondent had availed the service of goods transport agency' within the meaning of Finance Act, 1994? - Held that - There is no doubt that the respondent is a 'cargo handler'. Operation of container freight station undertake loading and unloading, packing or unpacking of cargo, which conforms to the main limb of the definition in section 65(23) of Finance Act, 1994. There is an exclusion limit in the said definition extending to handling of export cargo, passenger baggage and mere transportation of goods. An invoice creates liability of debt on the part of the recipient of the service. A consignment note, on the other hand, carries with it a certain legal burden, the issuing of a consignment note is a contractual undertaking made to the entity that handed over the goods to the agency of responsibility for safe delivery at the stipulated destination, A consignment note also creates binding responsibility for each consignment. In the absence of any evidence of such responsibility having devolved on M/s VA Enterprises and the issue of monthly bills does not, ipso facto, creates such liability and the impugned order is not at fault for having held that tax liability does not arise. Appeal dismissed - decided against Revenue.

Issues:
1. Discrepancy in expenses shown in balance sheet and ST-3 returns.
2. Identification of service provider and issuance of consignment note.
3. Tax liability on services used for providing exempted export cargo handling services.
4. Interpretation of definitions related to cargo handling and transportation of goods by road services.
5. Discharge of service tax liability on consideration paid to transporters.
6. Determination of whether the appellant availed 'goods transport agency' services.
7. Contents of consignment note and liability of recipient.
8. Difference between transportation of goods by road and services rendered by a goods transport agency.
9. Legal burden associated with consignment notes and invoices.
10. Upholding of impugned order and dismissal of Revenue's appeal.

Analysis:
1. The dispute arose due to a discrepancy between the expenses shown in the balance sheet and ST-3 returns. The appellant claimed that the expenses were for imports and exports, leading to the dropping of the demand by the impugned order on the grounds of non-conformance to taxable service description and time-barred audit.

2. The Revenue contended that transportation was done by a specific entity, and the monthly bills could be considered as consignment notes. Citing legal obligations and precedents, the Revenue argued that non-issuance of consignment notes does not absolve the liability to pay tax.

3. The Authorized Representative argued that even if export cargo handling is exempted, the services utilized should not be privileged by the exemption notification, relying on legal interpretations and precedents.

4. The respondent's Counsel relied on various sections of the Finance Act and a Tribunal decision to support their position regarding cargo handling services and transportation of goods by road services.

5. It was acknowledged that the appellant availed services but did not discharge the service tax liability, leading to a contention by the respondent that they were not liable for tax due to various reasons presented by their Counsel.

6. The main issue revolved around whether the appellant availed 'goods transport agency' services, considering their role as a cargo handler and the exclusion limits in the definitions provided by the Finance Act.

7. The case of Revenue emphasized the use of a transporter and monthly bills resembling consignment notes, linking it to the tax liability of the recipient based on legal provisions and precedents.

8. The distinction between taxation on transportation of goods by road and services provided by a goods transport agency was highlighted, along with the importance of consignment notes as per Service Tax Rules.

9. The significance of consignment notes over invoices in creating legal obligations and liabilities was discussed, emphasizing the contractual nature and responsibilities associated with consignment notes.

10. The impugned order was upheld based on the findings that the Revenue failed to counter, resulting in the dismissal of the appeal and disposal of cross-objections, as pronounced in court.

← Previous Next →