The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that any person including individuals who provided service concerning transport of goods by road was liable to service tax.
Pranish Carriers LLP, the appellant assessee was engaged in providing the services of Goods Transport Agency (GTA) on which the due service tax was paid by the recipient of the service i.e.INOX Air Products Ltd. [INOX] and the assessee was providing the Lorry Chassis to INOX on which specialized tanks/equipment for carriage of gas was mounted by INOX and these carriers with the mounted items were used for transportation of the gases.
The assessee appealed against the order passed by the Commissioner of Central Excise & Service Tax (Audit) for confirming the demand of Service Tax amounting to 4, 34,12,380/- (inclusive of Education Cess & S.&H. Education Cess) upon the party under proviso to Section 73(1) of the Finance Act 1994 and for the imposition of penalties.
Gopal Mundhra, the counsel for the assessee contended that the essence of the contractual arrangement between the assessee and INOX was a rendition of services of transportation from one location to another.
Also submitted that the assessee was responsible for completing the end-to-end transportation activity for Inox and the obligation under contract was clearly to transport the goods from one.
Sandeep Pandey, the counsel for the department contended that the assessee was evading the service tax, the business-cum-residence premises of the assessee were searched and various documents recovered were resumed under Panchnama.
The Bench observed that in the case of J.K. Spinning and Weaving Mills Ltd, the court held that Section 65(105(zip) of the Finance Act,1994 defines taxable service as ‘service provided or to be provided to any person, by a goods transport agency, concerning transport of goods by road in a goods carriage’ and from the legal definitions it was clear that any person (including individuals) who provides service concerning transport of goods by road was liable to Service Tax. There was no exclusion of individual truck owners from the purview of the Service Tax levy under the law.
The two-member bench comprising P K Choudhary (Judicial) and Sanjiv Srivastava (Technical) held that GTA was leviable on the person who was hiring/procuring the carriage of the goods for transportation of goods by road and therefore, the exemption had been granted to the individual who had provided the carriage of the goods to GTA.
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