TMI Blog2022 (8) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... und that under the circumstances, department s holding that the challans are consignment notes, is incorrect. The Department was confused where issuing show cause notice. In so far as the loading, unloading charges are concerned, the show cause notice considered them receipts for services rendered as Manpower Supply Agency . The impugned order treats them to be for the Goods Transport Agency Services . Penalties - HELD THAT:- The department has simply confirmed the service tax liability against the appellant without going into the details of arrangements between the appellant and his clients relying only on the documents like income tax returns, profit and loss account and balance sheet etc. The appellant s contention on the receipts being within exemption limits, over the years, is acceptable - the demand confirmed is not sustainable. Accordingly, the penalties imposed are not sustainable. The learned Commissioner (Appeals) has analyzed the issues correctly and has recorded correct findings. Even though, he decided the issue in the negative list regime, post 1.7.2012, the argument is valid for earlier period also and the impugned demand covers partly the period afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Parties authorize him, for transport of goods from Railway siding, on the back side of the Railway Receipt; they acknowledge also on the same as a token of receipt of the goods. He submits that Hon ble Finance Minister, in his budget speech on 08.07.2004, categorically announced that it was not the intention of the legislature to tax individual truck owners or operators. He relies on the decision in the case of C.C.E. C., Guntur vs. Kanaka Durga Agro Oil Products Pvt Ltd [2019 (15) S.T.R. 399 (Tri.-Bangalore).] and Order-in-Appeal passed in their own case by Commissioner (Appeals) for the subsequent period holding that the same falls under the negative list under Section 66D(p) of Finance Act, 1994. 4. Learned Chartered Accountant submits also that the appellant is not required to pay tax under Goods Transport Agency Service as the consignor and consignee are persons specified under Rule 2(1) (d) the Service Tax Rules 1994 read with Notification No.30/2012-ST dated 20.06.2012. He submits that the demand on notional freight, of trucks arranged from outsider on commission of Rs.100/- per challan, confirmed under Business Auxiliary Service , is not sustainable; the freight i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmits that the appellants have rendered the services on Goods Transport Agency Service and have issued challans which incorporate all the particulars as mentioned under Rule 4B read with second proviso to rule 4A of the Service Tax Rules, 1994. The appellant s contention that the demand was confirmed on the basis of assumption and presumption is incorrect. On the challenge of the appellant that whereas a maximum 18 MT can be carried in a truck in a trip, the demand is calculated as rate of 51.67 MT per truck, he submits that he demand was confirmed on the basis of records/ challans made available by the appellant only; it is possible that a single challan may have been used for more than one trip; if there is any ambiguity, it was open to the appellant to come forward with its own calculation with evidence the appellant failed to do so. He relies on Commissioner of Customs vs. D. Bhurmal [.1983 (13) E.L.T. 586 (SC.)] and submits that the department need not prove the case with mathematical precision. 8. Learned Authorised Representative further submits that Business Auxiliary Service also includes service rendered as a commission agent; the appellant arranged truck on a com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siding in Gorakhpur to different destinations in Nepal. Appellant issued challans for the work undertaken. It is the contention of the department that the said challan has all the ingredients of a consignment note and thus they are Goods Transport Agency . The appellant contends that the Department erred in holding that these delivery challans are nothing but consignment notes. We find that no contract or agreements have been expected to show that the appellant had undertaken any responsibility to transport the goods or it had just provided the trucks as owners of the trucks. We find that these challans, alleged to be consignment notes by the department, have not been issued against the receipt of goods and they have not undertaken safe delivery of the same from the consigner to the consignee. We have gone through the sample challans and find that the said challans do contain details like truck number, driver name and particulars of the goods. The said challans do not mention separately the consignor and the consignee. It is submitted that the Nepali Traders engaged these trucks from the appellant and others for transporting their own goods for transportation from Gorakhpur to di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Moreover, we find that it is also not established that the appellant s activity falls under Goods Transport Agency Services ; no agreement contract etc. whatsoever has been placed on record to arrive at the conclusion that the appellant had rendered Goods Transport Agency Services . The impugned order mainly relies on the part of the definition of Goods Transport Agency . The stress was on the challan alleging that it had all the particulars of a consignment note. It cannot be ascertained who is a consignor and who the consignee is. Such conclusion is erroneous; it is required to be established that the service provider is a Goods Transport Agency Services and only then one can proceed to examine the second part of the definition that the challan constitute the consignment note referred to therein. The appellant further contended that both the consigner and consignee are in Nepal. They are persons specified under Rule 2(1) (d) of the Service Tax Rules, 1994 read with Notification No.30/2012-ST dated 20.06.2012; the fact that the freight is paid by the foreign entity is not disputed by the Department; even it is assumed that the appellant is required to pay service tax, it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he department has simply confirmed the service tax liability against the appellant without going into the details of arrangements between the appellant and his clients relying only on the documents like income tax returns, profit and loss account and balance sheet etc. The appellant s contention on the receipts being within exemption limits, over the years, is acceptable. Under the circumstances, we are of the considered opinion that the demand confirmed is not sustainable. Accordingly, the penalties imposed are not sustainable. As we have held the issue in favour of the appellants, the issue of limitation becomes redundant. 15. We find that learned Chartered Accountant for the appellant has also submitted that for the subsequent period the show cause notice was issued to the appellants covering the period 2012-13 which was confirmed by the Assistant Commissioner of Central Excise and Service Tax Division Gorakhpur. On an appeal filed by the appellant learned Commissioner (Appeals) vide Order-in-Appeal No.119-120/ST/APPL/LKO/2017 dated 11.04.2017 has allowed the appeal and set aside the impugned order. He further submits that the order has not been appealed and, therefore, attai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not subject to service tax, demand of tax on freight is dropped, therefore, there is no requirement to discuss the issue of taxability on so called 'notional freight' (in respect of trucks arranged from outsiders on commission of Rs.100/- per challan). (ii) I now take up the issue whether the appellant is liable to pay service tax on commission received in respect of trucks arranged from outside truck operators. Adjudicating Authority has contended that the appellant is engaged in providing 'Business Auxiliary Service' and is liable to pay service tax. Whereas the appellant has contested that the said amount of Rs.100/- per truck is received from the transporter who transported the goods to Nepal. It is not separately paid by the Nepal party. The appellant has contested that since the appellant is not liable to pay service tax as a 'Goods Transport Agency' u/s section 66B of the Finance Act, 1994, the appellant is not liable to pay service tax on commission income for the period 01.12.2012 to 31.12.2013, the gross receipts/billing being below the threshold exemption limit as provided under Notification No.33/2012-ST dated 20.06.2012 in each of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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