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2024 (5) TMI 1343 - AT - Service TaxEligibility for refund of service tax paid on transportation charges - Definition and applicability of Goods Transport Agency (GTA) - Issuance of consignment notes and its implications on service tax liability - Applicability of previous judgments and notifications - HELD THAT - The Tribunal in the appellant s own case 2019 (1) TMI 1230 - CESTAT CHENNAI for the earlier period from June 2009 to May 2010 had considered the very same issue of refund of service tax for transport of their goods by road by M/s. Shiva Cargo Movers Ltd. The refund claim rejected by the department was upheld by the Tribunal. On perusal of the said Final order it is seen that the Tribunal had referred to the decision in the case of Chebrolu Agros Pvt. Ltd. 2017 (6) TMI 1248 - CESTAT HYDERABAD . It was observed that the said decision was maintained by Hon ble Apex Court. It is now brought to our notice that the appeal that was filed before the Hon ble Apex Court was in regard to the demand under Business Auxiliary Services and not GTA services. On perusal of the records it is seen that the appellant has now produced documents to show that M/s. Shiva Cargo Movers Ltd. has not issued any consignment note. The said transporter has issued only invoices periodically to collect transport charges. Thus taking note of the decisions in the case of Lakshminarayana Mining Company 2019 (7) TMI 917 - CESTAT BANGALORE and Ramco Cements Ltd. 2023 (9) TMI 1257 - CESTAT CHENNAI we are of the considered view that the appellant has to be given an opportunity to furnish documents and evidence that M/s. Shiva Cargo Movers Ltd. is not a Goods Transport Agency and also that no consignment notes were issued. The matter therefore requires to be remanded to the adjudicating authority who is directed to consider afresh refund claim of the appellant. The adjudicating authority shall decide applicability of the above cited decisions of the Tribunal independent and uninfluenced by the decision of Tribunal in the appellant s own case for the earlier period. Thus the impugned order is set aside. The appeal is allowed by way of remand to the adjudicating authority.
Issues Involved:
1. Eligibility for refund of service tax paid on transportation charges. 2. Definition and applicability of "Goods Transport Agency" (GTA) under Section 65 (50 b) of the Finance Act, 1994. 3. Issuance and significance of consignment notes under Rule 4B of the Service Tax Rules, 1994. 4. Applicability of previous Tribunal decisions and notifications. Detailed Analysis: 1. Eligibility for Refund of Service Tax Paid on Transportation Charges: The appellant, a manufacturer of Denatured Spirit and Rectified Spirit, sought a refund of Rs.36,39,204/- for service tax paid on freight charges to M/s. Shiva Cargo Movers Ltd. for the period from June 2010 to July 2013. The refund sanctioning authority and the Commissioner (Appeals) both denied the refund, asserting that the service tax was correctly paid. The appellant argued that M/s. Shiva Cargo Movers Ltd. did not qualify as a Goods Transport Agency (GTA) and thus was not liable for service tax, making the appellant's payment under the reverse charge mechanism incorrect. 2. Definition and Applicability of "Goods Transport Agency" (GTA) under Section 65 (50 b) of the Finance Act, 1994: The appellant contended that M/s. Shiva Cargo Movers Ltd., being the owners of the trucks, did not fall under the definition of a GTA as per Section 65 (50 b) of the Finance Act, 1994. The department, however, maintained that M/s. Shiva Cargo Movers Ltd. issued invoices containing the elements of a consignment note, thus fitting the definition of a GTA. The Tribunal noted that the core issue was whether M/s. Shiva Cargo Movers Ltd. was a GTA, as only services provided by a GTA are subject to service tax under Section 65 (105) (zzp). 3. Issuance and Significance of Consignment Notes under Rule 4B of the Service Tax Rules, 1994: The appellant argued that M/s. Shiva Cargo Movers Ltd. did not issue consignment notes but only invoices, which did not meet the criteria set out in Rule 4B of the Service Tax Rules, 1994. The Tribunal emphasized that the issuance of consignment notes is a critical factor in determining whether a service provider qualifies as a GTA. The Tribunal referred to previous decisions, including Lakshmi Narayana Mining Company Vs. Commissioner of Central Tax, Bengaluru South GST, which clarified that individual truck operators without consignment note issuance are not subject to service tax. 4. Applicability of Previous Tribunal Decisions and Notifications: The Tribunal considered previous decisions, such as Ramco Cements Ltd. Vs. Commissioner of Central Excise, Tiruchirappalli, and Chebrolu Agros Pvt. Ltd., which were relevant to the issue at hand. The Tribunal noted that in similar cases, it was held that transportation services provided by individual transporters without consignment notes are not taxable under the GTA category. The Tribunal also highlighted that Notification No.35/2004 dated 03.12.2004, which was cited by the department, applies only when consignment notes are issued. Conclusion: The Tribunal concluded that the appellant should be given an opportunity to provide documents proving that M/s. Shiva Cargo Movers Ltd. is not a GTA and did not issue consignment notes. The matter was remanded to the adjudicating authority for reconsideration, directing them to independently assess the refund claim based on the presented evidence and relevant Tribunal decisions. The impugned order was set aside, and the appeal was allowed by way of remand, leaving all issues open for further determination. (Order pronounced in the open court on 28.05.2024)
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