Industrial gases in VITT transported by carrier agency upon issue of Consignment Note qualify as GTA service and not renting and leasing: CESTAT [Read Order]

The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that Industrial gases in VITT transported by carrier agency upon issue of a consignment note qualify as GTA service and not renting and leasing.

M/s. Reehal Roadlines, the Appellant is engaged in transportation of goods and it is in possession of specialised Lorry Chassis suitable for carrying and transporting liquid gases stored in Vacuum Insulated Transport Tank (VITT), that can be mounted on the said Lorry Chassis.

M/s. INOX Air Product Pvt. Ltd. (INOXAP) took those Chassis on long term basis from Appellant as a transport contractor and availed services of the Appellant for transportation of its products, who was also paying Service Tax on Reverse Charge Mechanism as service recipient.

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Respondent-Department’s stand is that such service does not constitute Goods Transport Agency service but a declared service namely transfers of goods by way of hiring, leasing, licensing etc. without transfer of rights to use the goods in terms of Section 66E(f) of the Act. Accordingly, Appellant was put to show-cause notice for the above said period with above referred amount as Service Tax demand along with interest and penalty and subsequently it got adjudicated against Appellant’s stand that resulted in confirmation of duty demand, interest and penalty as referred above. Legality of the said order is assailed before this forum.

During course of argument Counsel for the Appellant Mr. Gopal Mundra submitted that issue is no more res-integra as in Appellants own case in respect of another transporter, CESTAT Allahabad had passed final orders setting aside the demand confirmed by the respective Commissioners in both the cases and the present case is identical for the reason that agreement executed between Appellant and INOXAP are similarly worded without any variation in the provisions.

A two member bench of Dr. Suvendu Kumar Pati, Member (Judicial) and Anil G. Shakkarwar, Member (Technical) viewed that nature of service can easily be identified from the terms of agreement executed between the Appellant and its customer M/s. INOXAP. Invariably throughout the agreement, reference is made to provisions for transportation of goods on payment with different conditions but nowhere there is any reference to any fixed collection of lease-rental by the Appellant from its customer M/s INOXAP.

It was evident that the payment is made purely on the basis of bill of transportation submitted in prescribed format for the whole month and not for leasing or renting of specialised Lorry Chassis by the Appellant with customer M/s. INOXAP, for which, the decisions passed in the case of M/s. Pranish Carriers LLP are squarely applicable to the case of Appellant.

Further, invoice and Consignment note being two separate kinds of documents, there is no requirement that full description including address, lorry numbers etc. should be available in the invoice, when content of Consignment note is itself referred in the statute.

The appeal is allowed and the order passed by the Commissioner of CGST & Central Excise, Navi Mumbai vide Order-in-Original is set aside with consequential relief, if any.

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