2023 (9) TMI 1282 - AT - Service Tax

Classification of services - cargo handling services or Goods transport agency services? - bundled services or not - demand computed on the basis of TDS Certificates in form 26AS issued by the Income tax department - Board Circular No. 104/07/2008-S.T. dated 6-8-2008 - extended period of limitation - suppression of facts or not - HELD THAT - During the period April 2012 to December 2014, the appellant was engaged by M/s. SSTAPL as a subcontractor to provide transportation service to M/s. JSL and for the period January 2015 to March 2017, the Appellant started providing Goods transport agency services directly to M/s. JSL. During both the periods, M/s JSL has paid service tax under GTA service as recipient of service. The contention of the department is that service tax is liable to be paid under 'Cargo handling service' by the Appellant and not by M/s JSL under GTA service. Thus, the Work Orders received by the Appellant from M/s SSTAPL and M/s JSL has to be analysed separately to determine the nature of the service rendered by the Appellant during these periods. After successful completion of the job and necessary certification by M/s. JSL, the Appellant raised invoices on M/s. SSTAPL for Transportation and Unloading of Coal from Sukinda Railway Siding to JSL, KNIC . The Appellant did not issue any 'Consignment Note' in the name of the consignee M/s. JSL. After loading of the goods into the Rakes, 'Consignment notes' were issued by M/s SSATPL to M/s. JSL, the consignee. Service tax as applicable was duly discharged under reverse charge by M/s. JSL on the GTA Service. It is evident from the clauses in each of the Work order issued to the Appellant by SSTAPL that the services fall under the category of Goods transportation and not Cargo handling service. However, since the consignment note in the present case has been issued by SSTAPL on JSL and not the Appellant, the said service qualifies as services of transportation falling under the negative list entry Section 66D(p) services by way of transportation of goods (i) by road except the services of (A) a goods transportation agency . The said service rendered by the Appellant to SSTAPL duly qualifies under the negative list and lies outside the ambit of Service tax. Accordingly, appropriate service tax in this case has been rightly paid by the consignee under GTA service as recipient of service. Hence the demand raised on the Appellant under 'Cargo handling service' during the period April 2012 to December 2014 is not sustainable. The service provided by the Appellant during the period January 2015 to March 2017, directly to M/s. JSL w.e.f. January, 2015, was GTA service and not 'Cargo Handling service'. Accordingly, the Appellant is not liable to pay service tax under the category of 'Cargo handling service' and service tax on the said GTA service has been rightly paid by the recipient M/s. JSL. Hence, the demand confirmed against the Appellant for this period is not sustainable. Extended period of limitation - Suppression of facts or not - HELD THAT - It is a settled position of law that the authorities subsequently cannot adopt a different view once a view has already been accepted during the audit proceedings. Thus, there is no suppression of fact involved in this case and hence the demand confirmed by invoking extended period of limitation is not sustainable - the demand confirmed in the impugned order is liable to be set aside on the ground of limitation also. The service rendered by the Appellant to M/s SSTAPL as a sub-contractor as well as M/s JSL directly, was transportation of goods service and not cargo handling service - the demand confirmed in the impugned order under 'cargo handling service' set aside on merit as well as on limitation - appeal allowed.

Summary

Issues Involved:
1. Classification of Service: Whether the services provided by the Appellant qualify as "cargo handling services" or "Goods transport agency services".
2. Demand of Service Tax: Validity of the demand for Service tax along with interest and penalty.
3. Limitation: Applicability of the extended period of limitation for the demand.

Summary of Judgment:

1. Classification of Service:
The primary issue revolves around the classification of services provided by the Appellant, whether they qualify as "cargo handling services" or "Goods transport agency services" (GTA). The Appellant contended that the services were essentially GTA services, while the Revenue classified them as cargo handling services.

For the period April 2012 to December 2014, the Appellant provided transportation services to M/s. Jindal Stainless Limited (JSL) through M/s. Sanjay Sahani Transport Agency (P.) Ltd. (SSTAPL). The work orders specified tasks such as rake handling and transportation of materials, which were deemed ancillary to the principal service of transportation. The Appellant raised invoices for "Transportation and Unloading of Coal" and did not issue consignment notes; instead, SSTAPL issued consignment notes to JSL. The Tribunal held that these services fall under the negative list entry for transportation services and are outside the ambit of Service tax.

For the period January 2015 to March 2017, the Appellant directly provided GTA services to JSL, issuing consignment notes and raising invoices. The Tribunal observed that the work orders and the nature of services provided were primarily for transportation, with handling services being ancillary. The Tribunal relied on Board Circulars and judicial precedents to conclude that the services should be classified as GTA services.

2. Demand of Service Tax:
A Show Cause Notice was issued demanding Service tax of Rs. 3,16,39,804/- for the period 2012-13 to 2016-17, computed based on TDS Certificates. The Tribunal found that the services rendered were correctly classified as GTA services, and the liability for Service tax was on the recipient, JSL, which had duly discharged the tax under reverse charge. The demand for Service tax under "cargo handling services" was deemed unsustainable.

3. Limitation:
The Tribunal addressed the issue of limitation, noting that an audit for FY 2012-13 to 2013-14 did not raise the disputed issue. It is a settled position of law that authorities cannot adopt a different view once a view has been accepted during audit proceedings. The Tribunal held that there was no suppression of facts by the Appellant, and the extended period of limitation was not invocable. Consequently, the demand confirmed by invoking the extended period was not sustainable.

Conclusion:
The Tribunal concluded that the services provided by the Appellant were transportation services and not cargo handling services. The demand for Service tax under "cargo handling services" was set aside on both merit and limitation grounds. Since the demand itself was not sustainable, the question of interest and penalty did not arise. The appeal filed by the Appellant was allowed.