The New Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that Service Tax under the category of Goods Transport Agency ( GTA ) cannot be demanded in the absence of a consignment note.
M/s. Vaishnav Marbles Private Limited, M/s. Lalit Marmo & Granites Pvt. Ltd and M/s. Sai Nath Natural Stones Pvt. Ltd, the appellants manufacture marble slabs and tiles for which they obtain marble blocks from various mines and engage individual transporters and truck owners to transport marble blocks. Show cause notices have been issued by the Department for the period 2005 to 2015 proposing demand of service tax under the category of GTA services. On adjudication, the demand has been confirmed. The appeal filed by the appellant has been rejected, relying on the decision in M.L. Agro Products Ltd versus CCE.
Counsel for the appellant submitted that they have availed the services of a transport operator and not of a transport agency for inward transportation of raw material/goods to their factory, and in their case, the Goods Transport Agency is not in existence and no consignment note is issued, therefore, the services rendered by Goods Transport Operator, do not fall under the category of Goods Transport Agency.
It was evident that the period covered in these appeals relates to both the pre-negative era and the post-negative era w.e.f. 1.07.2012. The relevant provisions for the period before 1.07.2012 are Section 65(50b) and 65(105)(ZZP) of the Finance Act, 1994, which defines the ‘Goods Transport Agency ‘ and the ‘Taxable Service’. The new Section 65B (26) of the Finance Act came into existence with effect from 01.07.2012 deferring GTA.
On perusal of the above statutory provisions, it is evident that to constitute a ‘Goods Transport Agency’, the provider of transportation service must issue the consignment notes or any other document by whatever name called.
In a recent decision, the Ahmedabad Bench in Chartered Logistics Ltd Vs. CCE observed that “Services of transportation of goods by a person other than GTA are exempt under Section 66D (P)(i)(A) of the Finance Act, 1994. By observing the above legal position we find that the services of the appellant are excluded from the taxable services since it is covered in the “Negative List‟ Entry under Section 66D (p)(i) of the Finance Act, 1994.”
A two-member bench Binu Tamta, Member ( Judicial ) and Hemambika R Priya, Member ( Technical ) held that even if a person has provided goods transport service but has not issued the consignment note, service tax from that person cannot be recovered under the category of GTA.
The CESTAT found that the case of the appellant is on the same footing as he availed the services of individual transporters and truck owners and in the absence of issuing the consignment note, the appellant cannot be made liable to pay service tax under the category of GTA.
J. Kainat appeared for the Appellant and Jaya Kumari, Authorised Representative appeared for the Respondent.
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