The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the service of transportation of goods by a person other than the Goods Transport Agency (GTA) and without a consignment note is eligible for exemption from service tax under section 66D(P)(i)(A) of the Finance Act,1994.
Chartered Logistics Limited, the appellant assessee had provided services that includes services like safe transportation of goods, upkeep of the vehicles, checking on route pilferages, maintaining consistency, also provide drivers/ supervisors on a 24-hour/ day basis, and arranging diesel for the vehicles.
The assessee appealed against the order passed by the Commissioner for confirming the demand for service tax and the imposition of penalty.
Vikash Agarwal, the counsel for the assessee contended that the service provided by the assessee during the disputed period was exempt from payment of service tax and the assessee was not issued any consignment note and the revenue classified the service of the assessee as “Supply of Tangible Goods for use Services which was not as per the law.
Further submitted that the services of assessee are also covered by the negative list vide clause (p)(i) of Section 66D of Finance Act and as per the said clause the services by way of transportation of goods by road except the services of a goods transportation agency or a courier agency are covered under the Negative list and are not taxable service.
G. Kirupanandan, the counsel for the revenue relied on the decisions made by the lower authorities and contended that the assessee was liable to pay tax for the service rendered on transporting of goods by road.
The Bench observed that if any person was providing services of transport of goods by road and was neither covered under the statutory definition of GTA nor courier agency, then he was not liable to pay any service tax on such transportation.
Also held that a person can be said to be a Goods Transport Agency or if the person provides services concerning the transportation of goods by road and issues the consignment note and it was clear that not all the people who transport goods by road are qualified as Goods Transport Agency.
Further stated that to qualify as services of Goods Transfer Agency (GTA), the GTA should issue necessarily a consignment note then only services provided by the GTA are taxable under Finance Act.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) held that the demand of service tax, interest, and penalty was not sustainable and liable to be deleted while allowing the appeal filed by the assessee.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
