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2015 (10) TMI 2002 - CESTAT BANGALORE

2015 (10) TMI 2002 - CESTAT BANGALORE - 2015 (39) S.T.R. 622 (Tri. - Bang.) - Liability of Service Tax on GTA Services Transportation of Inputs Appellant contended that they were not the receiver of services; thus demand not sustainable leave alone invocation of extended period Revenue drew attention to Rule 4(a) and Rule 4(b) of Service Tax Rules and submits that law is very clear; extended period has been rightly invoked and tax has been rightly demanded Held That:- They have been told .....

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ions of Section 80 of Finance Act, 1994 but demand for service tax, interest thereon and imposition of late fee are upheld Decided in favour of Revenue. - ST/397/2011-SM - Final Order No. A/20931/2015 - Dated:- 8-4-2015 - Shri B.S.V. Murthy, Member (T) Shri P. Ramakrishna, Advocate, for the Appellant. Shri S. Teli, AR, for the Respondent. ORDER Appellant is a manufacturer of excisable goods and on verification of accounts for the years 2004-05 to 2008-09 (up to 31-10-2008), it was noticed that .....

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ok me through samples of purchase order, invoice issued by M/s. Reliance Industries, supplier of inputs and the consignment note issued by M/s. PRC Logistics Ltd. His submission is that appellant was not the receiver of service from M/s. PRC Logistics and therefore appellant was not liable to pay service tax at all. Therefore he submitted that the demand itself is not sustainable leave alone invocation of extended period. He relied upon several decisions of this Tribunal and Hon ble High Court o .....

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ot [2010 (20) S.T.R. 122 (Tri.-Ahmd.)]. 2. The learned AR would draw my attention to Rule 4(a) and Rule 4(b) of Service Tax Rules and submits that the law is very clear and therefore the extended period has been rightly invoked and tax has been rightly demanded. 3. I have considered the submissions made by both sides. The relevant Rule 2(d)(v)(g) of Service Tax Rules provides that in relation to taxable service provided by a goods transport agency the consignor or consignee of the good .....

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freight. On the other hand it was the claim of the learned counsel that when the freight is not at all paid by the receiver of the goods to the transporter, it would mean that there is no nexus between the receiver and provider of service, there may not be a liability on the appellant as the receiver of service and therefore in terms of the provisions of the rule, the appellant does not become a person liable for payment of service tax in this case. 4. In the normal course this claim of the .....

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was indicated immediately/at works . It means that the order was FOR destination and therefore freight was on account of Reliance. However on going through the invoice, it was noticed that Reliance had shown the basic assessable value, added Cenvat deduction, cess and sales tax and freight separately. It is to be noted that the invoice did not show insurance separately. This would show clearly that insurance was absorbed by M/s. Reliance Industries Ltd. Even the consignment note issued by PRC Lo .....

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ely by the appellant in this case. 7. It is the submission of the appellant that they were not liable to pay service tax on the freight amount because the freight was paid by them to Reliance and they did not know how much was paid by Reliance to the service provider namely PRC Logistics and therefore they are not liable to pay. Further, on going through the consignment note, it was found that in the consignment note, the transporter had clearly mentioned that service tax has to be paid by .....

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ote that the service tax is on the account of the appellant. The appellants never questioned this observation/specific mention in the consignment note either to the transporter or to M/s. Reliance Industries Ltd. but simply filed the documents in their record for a period of five years without raising any doubts as regards the liability for service tax in spite of the advice given by the transporter to them. They did not even ask Reliance why they should pay the tax and did not even make a claim .....

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tanding that the freight will be charged separately, transportation will be made by someone else and service tax liability would fall on the appellant. In the absence of any correspondence disputing this observation or disputing the liability, this is the only conclusion that can be reached as regards service tax liability. Under the circumstances, I am unable to conclude that the appellant is not liable to pay service tax. In none of the decisions cited by the learned counsel the facts and did .....

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ssion made by the learned counsel was that the demand cannot be sustained beyond the normal period of limitation. 9. I have already observed above that for over a period of five years the appellants did not raise any doubt either with their business partners or with the departmental authorities as to whether their plea that they are not liable to pay service tax in spite of transporter advising them is correct or not. The bona fide belief could have been considered if they had at least ques .....

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