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TMI Blog2025 (5) TMI 1284X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner (Appeals), GST & Central Excise, Rajkot, involving the same issue. 1.1 The issue involved in Appeal Nos. ST/12568/2018 & ST/10578/2020 is that the department demanded service tax on the transportation charges borne by the appellant and shown in their Profit & Loss Account for their consignment sale during the F. Y. 2011-12 to 2013-14 in the case of M/s. Guru Ashish Ship Breakers & for F.Y. 2012-13 to January-2015 in the case of M/s. Rajendra Ship Breakers Pvt Ltd. The consignment agents of the appellant had paid the freight to the transporters and also discharged the service tax liability on such freight amounts paid by them. Since the service tax demanded by the department is already paid by their consignment agents, the appellant felt that it was not liable for payment of service tax on the freight amount which was shown by them in their books of accounts as expense. 1.2 The issue in appeal No. E/10329/2023 is that M/s Guru Ashsih Ship Breakers have availed Cenvat Credit of Rs. 9,96,643/- on GTA services, service tax of which was paid by their consignment Agent(s) whose details are given in the order-in-original dated 28.03.2022. It is alleged that the appellant has av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officers but they did not find any short-payment from records. The second audit party, doing the audit of same period or over lapping period, cannot allege that appellant has misstated or suppressed the facts from the departments. He relies on the case of Trans Engineers India Pvt. Ltd. - 2015 (40) S.T.R. 490 (Tri.-Mum.) in which it was held that- Revenue authority not to invoke extended period of limitation, when records of assessee audited by officers once and short-payment not found - Second audit party, doing audit of same period or overlapping period, could not have alleged misstatement or suppression of facts in view of authoritative judicial pronouncements in MTR Foods Ltd. [2012 (282) E.L.T. 196 (Kar.)] and Rajkumar Forge Ltd. [2010 (262) E.L.T. 155 (Bom.)], extended period cannot be invoked. Demand being beyond period of limitation, same was liable to set aside. 2.2 It was submitted that the Show Cause Notice issued to the appellant is time barred and subsequently impugned order is also void and bad in law. The department was fully aware of the activities and if the department was of the opinion that the appellant has not paid service tax on the transportation charges bor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rew our attention towards the conditions of the agreement executed between the appellant and their consignment agents. On perusing the same, it can be concluded that on behalf of the appellant, the consignment agent has to pay the transportation charges and the service tax. Accordingly, the consignment agents have paid the service tax on the transportation charges which was reimbursed to them as mentioned in the consignment sale note. Therefore, as per prevailing practice, the appellant is recording full sale price as their sale income and recording the expenses made by their consignment agent, which were reimbursed by the appellant to them under various heads of their expenses. It is also clarified that the transportation charges are shown in their invoice to arrive at the value on which central excise duty is to be paid as they have sold the goods on consignment basis. An Explanation to Rule 5 of the Central Excise (Valuation) Rules, 2000 stipulates that the freight from the factory to the depot/place of the consignment Agent shall be included in the assessable value. Accordingly, the appellant had shown transportation charges separately in the invoice and included in the price t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant to discuss whether the appellant is liable to pay service tax on GTA services or not. Therefore, I would like to reproduce Rule 2(1) (d) (B) of the Service Tax Rules, 1994 which reads as under: "Rule 2. Definitions. 1 (d) "person liable for paying service tax", (i) in respect of the taxable services notified under sub-section (2) of section 68 of the Act, means, (A) (B) In relation to service provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road, where the person liable to pay freight is, (I) any factory registered under or governed by the Factories Act, 1948 (63 of 1948); (II) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India, (III) any co-operative society established by or under any law; (IV) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder, (V) any body corporate established, by or under any law, or (VI) any partnership firm whether registered or not under any law including association of persons; any person who pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duly reflected in their ledger accounts as well as balance sheets for the relevant year, and were called out from their available documents only. 4.2 We find force in the above submission and on the basis of case laws quoted, we agree that extended of limitation cannot be applied. Even on merits, it is not denied that the consignment agent(s) to whom they were the principal had paid the amount of freight and since, under Rule 2(1)(d)(iv) of the Service Tax Rules, 1994, the service tax can be paid either by the person who is liable to pay freight or through his agent. In the instant case, service tax as per law was paid by the consignment agent (who had paid freight on behalf of the appellant) which was later on claimed from the appellant who showed in his books as expense. It is not disputed that the consignment agent(s) had paid the service tax in the case and therefore, there was no loss of Revenue to the Government. The tax got discharged as per law between the appellant and the consignment agent(s). Hence, no tax in any case escaped being paid. We are in agreement with this proposition. 4.3 In view of the foregoing, we find that Appeal No. ST/12568/2018 & ST/10578/2020 succee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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