No Service Tax on Individuals providing Transportation using Own Vehicles: CESTAT Appreciates Documentary Evidence [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench, appreciated documentary evidence and held that service tax is not leviable on individuals who are providing transportation using their own vehicles.

The facts of the case are that on the basis of the Income Tax Returns and ST-3 Returns filed by the appellant in 2016-17, a show cause notice was issued on 21.10.2021 proposing to demand Service Tax, along with interest, penalties and late fee. The Assistant Commissioner of CGST and Central Excise, Bongaigaon Division confirmed the demand under Sections 77and 78 of the Finance Act, 1994. Late fee was also confirmed under Section 70.

The appellant challenged this order before the Commissioner (Appeals) who had upheld the confirmed demands. Therefore, the appellant-assessee appealed before the CESTAT.

The counsel for the appellant submitted that the appellant owned four trucks and engaged them in transportation of petroleum products in his individual capacity. He made the case that the appellant is exempt from levy of Service Tax by virtue of Entry No. (p) of the Negative List of Services under Section 66D of the Finance Act, 1994.

Further, it was submitted that if the appellants are considered as a Goods Transport Agency (GTA), the liability to Service Tax lies on the recipients of service under reverse charge mechanism (RCM) in terms of Rule 2(1)(d)(v) of the Service Tax Rules, 1994. The opposing counsel argued that the appellant has not furnished any evidence to substantiate their claim that they have only provided the vehicles in an individual capacity and so cannot claim exemption.

CESTAT referred to the decision of CESTAT, Kolkata in M/s. Nanu Shome & Co v. Commissioner of CGST & C.Ex wherein it was held that the difference between Income Tax Returns and ST-3 Returns cannot be the sole basis for raising the demand. The bench also observed that the documentary evidence submitted by the appellant indicates that they are an individual who has supplied vehicles for supply of petroleum products and other materials in their individual capacity.

K. Anpazhakan (Technical Member) held that the transportation service rendered in the present case is exempt from the levy of Service Tax as per Entry No. (p) of the Negative List of Services under Section 66D. The order was set aside and the appeal was allowed, accordingly.

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