The Kolkata bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has quashed a Service Tax demand of ₹85.9 lakh against Tata Power Company Limited, providing relief to the company.
The bench observed that in the absence of a consignment note, one cannot be classified under Go[ods Transport Agency ( GTA ) service classification.
Navigate GST Complexity: Expert Guidance on Appeals – Register now
A demand was made by the Commissioner of Central Excise ( CCE ), Jamshedpur, against the TATA power for service tax under the ‘Goods Transport Agency‘ ( GTA ) category, based on the transportation of ash generated by Tata Power’s thermal plants during power generation.
The commissioner had confirmed the demand of ₹85,95,403, along with interest and an equal amount in penalties, asserting that the transportation services received by Tata Power should be classified as GTA services and thus subject to reverse charge mechanism under the Finance Act, 1994.
Tata Power, however, contested the demand, arguing that the transportation activities involved in ash disposal did not meet the criteria for classification as GTA services due to the absence of a “consignment note” issued by the transporter. Instead, the company provided a delivery challan and weighment slip detailing the weight and transportation specifics, which were issued by Tata Power itself.
Navigate GST Complexity: Expert Guidance on Appeals – Register now
The company also pointed out that the transporters raised bills based on these documents, and not on a consignment note typically required for GTA services under Rule 4B of the Service Tax Rules.
The bench of Ashok Jindal ( Judicial member ) and Anpazhakan ( Technical member) concurred with Tata Power, deciding that without the issuance of a consignment note by the transporter, the transportation service cannot be classified as a Goods Transport Agency service.
The Tribunal referenced similar rulings from past cases, such as South Eastern Coal Fields Ltd. vs. CCE Raipur and Mahanadi Coalfields Ltd. vs. CCE. In all these matters, the absence of a consignment note was found to disqualify transportation services from being categorised as GTA services, thus exempting them from Service Tax liability under RCM basis.
Navigate GST Complexity: Expert Guidance on Appeals – Register now
Furthermore, the tribunal observed that the extended period of limitation invoked by the Department was also not applicable, as there was no evidence of suppression of facts or intent to evade tax. Consequently, the tribunal set aside the demand along with penalty.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
