The appellants are engaged in the manufacture of Copper Anode, Sulphuric Acid and Phosphoric Acid. During the course of Audit, it was noticed that the appellants were availing the services of Custom House Agents for shipment of their export cargo. Invoices raised by the Custom House Agents for the expenditure towards the export of finished goods including lifting charges, PSA SICAL charges, local transportation charges, Security Guard charges, weighment charges, etc.,. It appeared to the Department that the appellant failed to pay the Service Tax on transportation charges of the export cargo for the period from August 2006 to December 2010. Show Cause Notice was issued on 15.09.2011 proposing to demand the Service Tax along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand along with interest and imposed penalty. On appeal, the Commissioner (Appeals) upheld the same.
Counsel Akshit Malhotra appearing for the appellant submitted that the main argument put forward by the appellant is that the Custom House Agents engaged by them were also truck owners/truck operators and that the latter had not raised any consignment note for the said service.
He submitted that the appellants are not liable pay Service Tax as without issuance of consignment note by a GTA, the activity of transportation by road will not fall within the ambit of GTA services.
Authorised Representative N. Satyanarayanan appeared and argued for the Department said that the discussions made in the Order-in-Appeal was adverted to by the AR to submit that merely because the consignment note has not been issued, the appellant cannot escape the liability of paying Service Tax.
The division bench of Sulekha Beevi C.S., Member (Judicial) Hon’ble Mr. Vasa Seshagiri Rao, Member (Technical) noted that the As per the definition under 60(50b) of the Finance Act, 1994, only if the service provider in relation to the transportation of goods by road issues a consignment note, the levy of Service Tax would be attracted to the carriage of goods by the goods transport agency. The Service Tax Rules under Section 2(1)(b), provides that the recipient of service is liable to pay the Service Tax.
The Tribunal said that the demand has been raised upon the appellant alleging that they are the recipient of services of goods transport agency services provided by the CHA. Admittedly, the appellant has not been issued a consignment note.
It was observed by the tribunal that the situation is entirely revenue neutral as well as the fact that several audits have been conducted raising the objection of non-payment of Service Tax under GTA services. The Department had full knowledge about the issue and still the Show Cause Notice has been issued invoking the extended period which in our view cannot be sustained.
Case title: M/s. Vedanta Limited v/s Commissioner of GST and Central Excise
Citation: Service Tax Appeal No. 40354 of 2014