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2016 (12) TMI 732 - AT - Service TaxLevy of tax - freight charges for transportation of sugarcane from fields - whether during the period 2005-06 to 2006-07, appellant is liable to discharge the Service Tax liability on the amounts paid by them as freight charges for transportation of sugarcane from fields? - Held that: - We have scrutinised the bill no. 93537 which was produced by the learned Counsel. On perusal of the said bill which had been settled by the appellant, to the farmer, clearly indicated that the appellant had deducted an amount paid by them towards harvesting cost to labours and transportation cost of sugarcane to their factory. After reducing the amount paid, appellant settled balance bill to the farmer. We also find that the learned departmental representative putting on record a letter received also includes a bill settled by the appellant wherein it is indicated that appellant had deducted the transportation cost and paid the same to the transporter. On this factual matrix in this case, we have to hold that appellant need not pay Service Tax on the amount of transportation charges. If the appellant had borne and paid transportation charges that would have been liable to pay Service Tax liability under Reverse Charges Mechanism as per the provision of Finance Act, 1994 and Rules made there under. Again there are no provisions for appellant to pay tax on deducted amount, from the final settlement of sale of sugarcane, as it cannot be treated as transportation charges paid by the appellant. The learned Counsel was correct in placing on record that similar issue came in before the Bench, in the case of Bhima Sahakari Sakhar Karkhana [2015 (10) TMI 627 - CESTAT MUMBAI] for taxability of amount paid to truck owner, are squarely applicable in this case and are in favour of the appellant herein, where it was held that there will be no Service Tax liability on the appellant sugarcane mills, as they have not received the service from a Goods Transport Agency. Appeal allowed - decided in favor of appellant-assessee.
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