Bajrang Enterprise,appellant-assessee, was a sole proprietorship engaged in providing road transportation services using its own truck, without issuing consignment notes. It had registered for service tax under the category of ‘transportation of goods by road’ but did not file returns, believing it was not liable to pay service tax.

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During FY 2015-16 and 2016-17, it received over ₹1.5 crore as transportation charges. Based on data from the Income Tax Department, the department noticed a mismatch between income declared in tax returns and the absence of service tax filings.

A Show Cause Notice was issued on 29.12.2020, demanding ₹8.25 lakh in service tax, along with interest and penalty, by invoking the extended period of limitation. The demand was confirmed through the Order-in-Original and later upheld by the Commissioner (Appeals). The assessee challenged this before the tribunal.

The assessee counsel argued that service tax was not applicable since the transportation services were provided without issuing consignment notes, and such services were already held non-taxable in similar cases. It was undisputed that the assessee, a sole proprietorship with a single truck, was not acting as a Goods Transport Agency (GTA), and the department had accepted this fact. Hence, the service fell under the Negative List and was not liable to tax.

The counsel also submitted that even if the services were considered GTA services, tax was still not payable by the assessee. For services provided to Balmer Lawrie Ltd., a government-owned company, the tax liability was on the recipient under the Reverse Charge Mechanism. For services to other parties, the liability lay with the recipients as they were either corporate bodies or registered firms, as per Notification No. 30/2012-ST.

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Additionally, the counsel pointed out that individual consignment values were below ₹1,500, qualifying for exemption under Notification No. 25/2012-ST. The Order-in-Appeal itself recorded values of ₹750 and ₹1,400.

Based on these grounds, the assessee requested that the demand, interest, and penalty be set aside. The departmental representative supported the findings of the lower authority.

A single member bench K.Anpazhakan (Technical Member) found that the assessee, a sole proprietorship with a single truck, provided transportation services without issuing consignment notes and therefore could not be classified as a GTA. It held that such services fell under the Negative List and were not taxable.

The appellate tribunal also accepted that even if treated as GTA services, the tax liability for services provided to Balmer Lawrie Ltd., a government company, was to be discharged under the Reverse Charge Mechanism.

Additionally, the tribunal noted that the individual consignment values were ₹750 and ₹1400, below the exemption limit of ₹1500 as per Notification No. 25/2012 ST, and hence exempt from service tax.

Accordingly, the CESTAT set aside the demand, interest, and penalty and allowed the appeal with consequential relief.

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