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of <h1>Tribunal rules in favor of appellants on service tax liability for freight paid by consignment agents</h1> <h3>M/s AMARAVATHI SRI VENKATESA PAPER MILLS LTD Versus CCE, MADURAI</h3> M/s AMARAVATHI SRI VENKATESA PAPER MILLS LTD Versus CCE, MADURAI - TMI Issues:Service tax liability on freight paid by consignment agents on behalf of appellants.Analysis:The case involved the question of service tax liability on freight paid by consignment agents on behalf of the appellants. The advocate for the appellants argued that the consignment agents were paying the freight and service tax, which was being recovered from the ultimate customers. The advocate relied on a previous order and submitted that the appellants should not be held liable for the service tax. On the other hand, the department argued that the consignment agents were acting as agents for the appellants, making the appellants liable to pay the service tax. The legal provision under Rule 2(1)(d)(v) of the Service Tax Rules, 1994 was cited to support this argument.The Tribunal considered the submissions from both sides and examined the facts of the case. It was noted that the consignment agents had indeed paid the freight to the transporters, which was not disputed. The impugned order confirmed that the consignment agents had recovered the freight from the ultimate buyers. Rule 2(1)(d)(v) of the Service Tax Rules, 1994 was analyzed, which specifies the person liable for paying service tax in the case of goods transport agency services. The Tribunal observed that both the appellants and the consignment agents fell under the category of persons liable to pay service tax. However, it was crucial to establish whether the consignment agents had paid the freight on behalf of the appellants.The Tribunal found that the consignment agents had indeed paid the freight amounts themselves, as evidenced by the certificates submitted by the advocate. It was concluded that the consignment agents were the ones liable to pay the service tax since they had paid the freight amounts directly. Therefore, the Tribunal held that the demands raised against the appellants could not be sustained. Following the precedent set by a previous order dated 11.03.2011, the Tribunal set aside the impugned orders and allowed all the appeals, ruling in favor of the appellants.
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