2017 (3) TMI 15 - AT - Service Tax

Transportation charges - transportation of sugarcane from the Cane Collection Center to the Sugar factory - Held that - there being no suppression or contumacious conduct on the part of the appellant the extended period of limitation is not invocable - on merits also the appellant have only facilitated the farmer in transport of the sugarcane to their factory gate which was otherwise the obligation of the farmer. Accordingly no Service Tax was payable on the transport charges incurred by the appellant - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Extended period of limitation for demand of Service Tax.
2. Liability of Service Tax on transport charges incurred by the appellant.

Extended Period of Limitation:
The case involved a demand for payment of Service Tax on transport charges incurred by the appellant for transporting sugarcane from a collection center to their factory. The Superintendent of Central Excise demanded the payment, but the appellant contested, stating that no consignment note was issued and the transporter was not a goods transport agency but individual truck owners. The show cause notice was issued after a period of almost four years, and the appellant argued that the extended period of limitation should not be invoked. The Tribunal held that there was no suppression or contumacious conduct on the part of the appellant, thus ruling that the extended period of limitation was not applicable.

Liability of Service Tax:
The appellant contended that the transporters were individuals using their own trucks, not issuing any consignment note or goods receipt (GR), and it was the farmer's obligation to deliver sugarcane to the factory gate. The appellant claimed they only facilitated the transport of sugarcane, and the transport cost was adjusted in the price paid for the sugarcane. The Tribunal, after considering the arguments, held that the appellant merely facilitated the farmer in transporting sugarcane to the factory gate, which was the farmer's obligation. Consequently, the Tribunal ruled that no Service Tax was payable on the transport charges incurred by the appellant. The appeal was allowed, the impugned order was set aside, and the appellant was entitled to consequential benefits as per the law.

In conclusion, the Appellate Tribunal CESTAT ALLAHABAD ruled in favor of the appellant, M/s. Wave Industries Pvt. Ltd., stating that the extended period of limitation was not invocable, and no Service Tax was payable on the transport charges incurred by the appellant for transporting sugarcane. The impugned order was set aside, and the appellant was granted consequential benefits.