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2019 (10) TMI 1416 - AT - Service TaxLevy of service tax - GTA service - transport subsidy - reverse charge mechanism - service provider – service recipient relationship between the farmer and the appellant factory - intent to evade payment of duty or not - extended period of limitation - HELD THAT:- The facts are not in dispute that the appellant procures sugarcane from the farmers and pays an amount per tonne of sugarcane. The sugarcane is delivered by the farmers to the factory in their own transport vehicles such as bullock carts, tractors etc. The sale takes place at the factory. If the farmer is located far from the factory (beyond 10 K.M or beyond 20 K.M), evidently, he will have to incur some cost towards transporting his own sugarcane to the factory. In addition to paying for the sugarcane, the appellant is also subsidising the cost of such transportation at some fixed rates - in the first place that the farmer is not rendering any service to the appellant because he is transporting his own goods. Until the goods are delivered to the factory, the services, if any rendered by the farmer is only a self service. Therefore, there are no service provider – service recipient relationship between the farmer and the appellant factory. The goods are not necessarily carried in a motor vehicle which falls within the definition of “goods carriage” and no service is rendered by the farmer to the appellant and hence there is no service provider – service recipient relationship. Also, it is found that the issue of consignment note which is an essential ingredient for goods transport agency services to be called so, is also missing in the present case - no service tax can be levied upon the appellant on the amount of “transport subsidy” which they paid to the farmers who bring their sugarcane for delivery to the factory. Since no service tax is chargeable, the entire demand in the impugned order along with interest and consequential penalties need to be set aside. On an identical issue in the case of M/S. NANDGANJ SIHORI SUGAR CO. VERSUS CCE. LUCKNOW [2014 (5) TMI 138 - CESTAT NEW DELHI], it has been held that no service tax is payable under reverse charge mechanism under the Goods Transport Agency services for the amounts paid for transportation of sugarcane by the farmers to the factory. Appeal allowed - decided in favor of appellant.
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