2023 (11) TMI 723 - AT - Service Tax

Nature of transaction - Classification of services - Supply of Tangible Goods Services or GTA Services - supply of chassis by the appellant on which the specialized tanks/ equipments were mounted by M/s INOX - period from October, 2010 to March-15 - HELD THAT - Undisputedly, appellant was issuing consignment notes to cover the transportation of the goods from premises of service recipient to various points and for such transportation he was paid tax on the fixed amount and variable amount, nature of payment will not alter the nature of transaction. The transaction continues to be governed by the documents made in this regard which are the consignment notes. These consignment notes clearly established that the service provided by the appellant was the services of GTA and it has been constantly held that once consignment notes are issued then there cannot be any doubt in this regard. In the case of SHRIPAD CONCRETE PVT. LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST, SURAT-I 2023 (8) TMI 707 - CESTAT AHMEDABAD , the issue has been examined both for pre-negative list period and post-negative list period and it was held that the appellant s service is correctly classifiable under Goods Transport Agency service for which service recipient M/s. Ultratech Cement Limited have discharged the service tax as required under Rule 2(d) of Service Tax Rules, 1994 under reverse charge basis. Therefore, the demand under the category of Supply of Tangible Goods service shall not sustain. As all the evidences available on record and the decisions as above clearly show that the transactions were of GTA, service tax has rightly paid by the recipient of service i.e. M/s Inox. Admittedly, in the present case entire tax due has been paid in respect of these transactions between the appellant and his client. That being, the same transaction could not be levied to service tax both at the hands of the service recipient and the service provider under different category of services. In this case, if these transactions were to be taxed under the category of SOTG, as has been held by the impugned order entire amount paid by the service recipient under the category of GTA services on the reverse charge basis should have been refunded - There is no scope of double transaction under the statute. The demand made in the present case after noting the payment of tax as the hand of service recipient the same transaction goes contrary to the Article 265 of the Constitution and hence cannot be sustained. The demand cannot be sustained on merits - issues of extended period of limitation, demand of interest and penalties imposed are irrelevant and are not being taken up - appeal allowed.

Summary

Issues Involved:
1. Classification of services provided by the appellant.
2. Liability to pay service tax.
3. Applicability of extended period of limitation.
4. Imposition of interest and penalties.

Summary:

1. Classification of Services Provided by the Appellant:
The core issue was whether the services provided by the appellant fell under "Goods Transport Agency" (GTA) or "Supply of Tangible Goods Services" (SOTG). The appellant contended that they provided GTA services, evidenced by the issuance of consignment notes for the transportation of goods, and argued that effective control and possession of the lorry chassis remained with them. The adjudicating authority initially classified the services under SOTG, citing that the appellant provided lorry chassis to INOX without transferring effective control.

2. Liability to Pay Service Tax:
The Tribunal examined the agreements between the appellant and INOX, highlighting terms that indicated the appellant's responsibility for the maintenance, insurance, and statutory compliance of the vehicles. The Tribunal concluded that the appellant was indeed providing GTA services, as the consignment notes issued substantiated the transportation of goods by road. The Tribunal referenced multiple case laws, including "Shripad Concrete Pvt. Ltd. Vs Commissioner of Central Excise & ST, Surat-I" and "Narendra Road Lines Pvt. Ltd.," to support its decision that the services should be classified under GTA, for which INOX had already paid service tax under the reverse charge mechanism.

3. Applicability of Extended Period of Limitation:
The Tribunal noted that the issue was interpretational in nature and the appellant believed that the tax was payable under GTA, which was effectively done by INOX under the reverse charge mechanism. Therefore, the extended period of limitation was not applicable.

4. Imposition of Interest and Penalties:
Given that the service tax had already been paid by INOX, the Tribunal found no basis for the demand of service tax, interest, or penalties on the appellant. The Tribunal emphasized that double taxation on the same transaction would contravene Article 265 of the Constitution.

Conclusion:
The Tribunal allowed the appeal, setting aside the demand of service tax, interest, and penalties imposed on the appellant. The judgment underscored that the services provided by the appellant were correctly classifiable under GTA, and the service tax paid by INOX under the reverse charge mechanism was valid.