9911796707
TMI Blog2010 (6) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... age, handling and forwarding charges. The Department was of the view that the appellants, who reimbursed freight charges to the suppliers being receivers of the GTA Services through the suppliers as their agents, were liable to pay the Service tax and on this basis SCNs were issued to the appellants for recovery of Service tax along-with interest on the GTA services alleged to have been received by them for transportation of the goods from Nepal border to their factory premises. SCNs also proposed for imposition of penalties on the appellants under Sections 76, 77 & 78 of the Finance Act, 1994. The demands were confirmed by the Assistant Commissioner. On appeal to the Commissioner (Appeals), the Commissioner (Appeals) vide the impugned orders-in-appeal upheld the Assistant Commissioner's orders and rejected the appeals. It is against these orders of the Commissioner (Appeals), that the appellants filed these appeals. 3. Heard both sides. 4. Shri Bipin Garg, Advocate, the learned Counsel representing the appellants, pleaded that dispute in these cases is as to whether the appellants are service recipients in respect of GTA services received through Nepalese suppliers from the Goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctory premises, that today about 15 appeals are listed and there are some 25 more appeals also pending, that in view of this, all these must be heard together and disposed of by same bench, that since basic dispute in these appeals is as to whether the appellants are liable to pay service tax on the GTA services alleged to have been received by them, these cases must be heard by a division bench and single bench is not competent to hear the same, that the appellants' transactions with the suppliers cannot be said to be on FOR basis as the suppliers for each supply of the yarn issued two invoices one for value of the goods and the other for reimbursement of expenses like transportation from Nepal border to appellants' factory insurance charges, handling & cartage etc.; that the appellants have to be treated as recipients of GTA services through Nepalese suppliers as the Nepalese suppliers have engaged the transporters on the instructions of the appellants as their agents; that the liability to pay service tax on the GTA service is on the person who pays or is liable to pay freight either himself or through his agent; that in these cases, the appellants paid transport expenses throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involving the same issue. 9. As regards the objection raised by the learned DR, with regard to jurisdiction of Single Member Bench to hear these appeals, sub-section 3 of Section 35D of Central Excise Act, 1944, is as under "The President or any other member of the Appellate Tribunal, authorised in this behalf by the President, may, sitting singly, dispose of any case which has been allotted to the Bench of which he is a member, where - (a) in any disputed case, other than a case where the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment is in issue or is one of the points in issue, the difference in duty involved or the duty involved; or (b) the amount of fine or penalty involved, does not exceed Rs. 10 lakhs." 9.1 Thus, the jurisdiction of single Member Bench is over those cases, other than the cases involving an issue relating to rate of duty or the valuation, where differential duty involved or redemption fine or the penalty involved does not exceed Rs. 10 lakh. The point of dispute in these cases is as to whether the appellants, who have imported yarn from Nepalese suppliers and who accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be liable to pay service tax at the rate specified in Section 66, in such manner and within such period as may be prescribed. However, sub-section (2) of Section 68 provides that notwithstanding anything contained in sub-section (1), in respect of certain services, the Central Government may, by notification, specify persons liable for payment of Service tax. Under Notification No. 35/04-S.T., dated 3-12-04 issued under Section 68(2), in respect of GTA service, the person who pays or is liable to pay freight either him self or through his agent for transportation of goods by road in a goods carriage would be the person liable to pay the service tax in case consignee or consignor of the goods falls in the categories as mentioned in the notification. Some of the categories mentioned in the notification are - any factory registered under or governed by the Factories Act, 1948; any company formed or registered under the Companies Act, 1956; any corporation established by or under any law etc. There is no dispute that the appellants fall in the category of person enumerated in this notification. The dispute is as to whether the appellants can be said to be the persons who pay or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngaged the transporter either directly or through the Nepalese suppliers and therefore they cannot be treated as recipients of GTA services. In these cases, the appellants imported yarn from the Nepalese suppliers and their contract with the Nepalese suppliers is the contract for supply of the goods i.e. yarn and not any particular service; arranging the transport of the goods within the Nepal and from Nepal border to the appellants' factory premises by the Nepalese suppliers is an activity incidental to supply of the goods, for which the Nepalese suppliers had engaged transporters. There is no evidence produced to show that Nepalese suppliers had acted as the agents of the appellants for arranging transportation from Nepal border to the factory premises of the appellants. Just because the Nepalese suppliers had billed the appellants separately for transportation from Nepal border to factory premises alongwith other expenses, they do not become the agents of the appellants. In view of this, the appellants cannot be treated as recipients of GTA services in terms of Notification No. 35/04-S.T. and hence liable to pay Service tax. 11. As regards the points on which Commissioner's cla ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
