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2022 (3) TMI 803 - AT - Service TaxLevy of service tax - supply of tangible goods for use service - GTA - levy of penalty - reverse charge mechanism - period April 2011 to March 2016 - HELD THAT:- As the basis of issuance of show cause notice is the contract between appellant and JMC India Ltd., Mumbai and after examining the said contract with M/s. JMC, the alleged demand under the category of supply of tangible goods for use has been dropped by the adjudicating authority and said finding of the adjudicating authority has not been challenged by the Department and no other contract is the basis of issuance of show cause notice, in that circumstances, the demand against the appellant is not sustainable. Admittedly, wherein the goods transportation activity has been carried out and consignment note has been issued by the appellant, the appellant is not liable to pay service tax but the service recipient is liable to pay service tax under the reverse charge mechanism and it is recorded by the adjudicating authority in the impugned order that service recipient has discharged service liability thereof. Therefore, the said allegation is not sustainable. In some of the cases the appellant transported the good by road without issuance of the consignment note, the said activity prior to June 2012 was not classifiable under category of services as no consignment note was issued and it is prime requirement to demand service tax under the category of good transport agency service. Further, the appellant has hired out vehicles to other GTA service providers, who have issued consignment notes to their clients. Such activity of the appellant was also exempt under notification no. 1/2009-ST dated 5.1.2009 for the period prior to 30.6.2012 and exempt under notification no. 21/2012-ST dated 20.6.2012 for the period post July 2012. The appellant has transferred the right to use vehicle to its client and such activity was not covered under supply of tangible goods service prior to June 2012 as the possession and control was also given to the person who had the right to use the goods and such activity amounts to deemed sales covered in negative list from July 2012. But the appellant has discharged the service tax liability from the period 2015-16 in such cases. The appeal is allowed - decided in favor of appellant.
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