The Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) in M/s Rathi Tiles Pvt. Limited v. CCE, Jodhpur held that the liability for payment of service tax under GTA cannot be sustained against the appellant in the absence of consignment notes. The division bench clarified that the debit notes issued by the individual truck owners cannot be treated as consignment notes for imposing tax.
Appellant is manufacturer of marble products, gets slabs from mines and get the transported through individual truck owners to their factory. The payment of freight is made by the appellant to such individual truck owners.
The department held that the appellant is liable to remit service tax under the category of GTA. The assessee contended that
The appellant does not receive any invoice/ document/ consignment note for transport of such marble blocks from the individual truck owners. The only document which is generated by the appellant by way of debits notes indicating the freight paid for such transport.
Ms. Asmita Nayak, Sh. Ankit Totuka & Sh. R. K. Ranjan, counsels appeared on behalf of the appellant contended that there is no tax liability under the head GTA in the absence of consignment notes. Various case laws were cited in support of the said contention.
“The issue which stands settled in the various case laws cited by the appellant is that as long as no consignment note is issued in terms of Rule 4B of the Service Tax Rules, 1994 by the transporter, the service tax liability under the category of GTA service does not arise. There is no dispute in the facts of the present case that the individual truck owners do not issue any consignment notes. The debit notes issued by the appellant indicating the freight payable cannot be considered as a consignment note as per Rule 4B ibid.
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