2018 (6) TMI 1010 - AT - Service Tax

GTA Service - Appellant is transporting Food grains under a contract which has been awarded by the District Supply Officer (DSO) for transportation of food grains under the Public Distribution Scheme - Held that - The Appellant has been appointed Food grains Transport contractor for transportation of goods from one place to another. The Appellant is engaged in transportation of food grains under the PDS (Public Distribution Scheme). The goods are transported on direction of District Supply officer and are under his control. There is no consignor and consignee in such case. During the transportation stage, the Appellant does not acquire any lien on the goods which is implicit in the issue of a consignment note. The document issued by District Supply Officer conveying the goods transported cannot be construed as a consignment note to render the Appellant to be a goods transport agency. Appeal allowed - decided in favor of appellant.

Issues:
1. Whether the service provided by the Appellant falls under the category of Goods Transport Agency as per section 65(105)(zzp) of the Finance Act, 1994?
2. Whether the Appellant's services qualify as "Cargo Handling Service" and are exempt from service tax under Notification 10/2002-ST?
3. Whether the Appellant should be liable to pay service tax for transporting food grains under the Public Distribution Scheme?
4. Whether the document issued by the District Supply Officer can be considered a consignment note to classify the Appellant as a goods transport agency?

Analysis:

Issue 1:
The Appellant was transporting food grains under a contract awarded by the District Supply Officer (DSO). The authorities contended that the service provided fell under the category of Goods Transport Agency as per section 65(105)(zzp) of the Finance Act, 1994. However, the Appellant argued that their services included loading and unloading of food grains, making them eligible for exemption under "Cargo Handling Service." The Tribunal analyzed the nature of the Appellant's activities and concluded that they were not a goods transport agency based on the absence of a consignment note and the control of the DSO over the goods during transportation.

Issue 2:
The Appellant claimed exemption from service tax under Notification 10/2002-ST by arguing that their services should be classified as "Cargo Handling Service." They relied on previous judgments to support their position. The Tribunal considered these arguments but ultimately rejected the appeal, stating that the Appellant did not meet the criteria for exemption based on the nature of their services and the absence of a consignment note.

Issue 3:
The dispute also revolved around whether the Appellant should be liable to pay service tax for transporting food grains under the Public Distribution Scheme. The Tribunal examined the specifics of the transportation arrangement, the control of the DSO over the goods, and the absence of a consignment note. Based on these factors and relevant case law, the Tribunal ruled in favor of the Appellant, setting aside the demand for service tax.

Issue 4:
A crucial aspect of the case was whether the document issued by the District Supply Officer could be considered a consignment note to classify the Appellant as a goods transport agency. The Tribunal analyzed the legal definitions and requirements for a consignment note, ultimately determining that the document in question did not meet the criteria. This finding supported the conclusion that the Appellant was not a goods transport agency, leading to the allowance of the appeal and the rejection of the demand for service tax.

In conclusion, the Tribunal's detailed analysis of the Appellant's services, the legal definitions involved, and the specific circumstances of the case led to the decision to set aside the demand for service tax, ruling in favor of the Appellant based on the absence of characteristics required to classify them as a goods transport agency.

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