2017 (7) TMI 195 - AT - Service Tax

Service Tax Exemption for Sugarcane Transport: Consignment Note Key

M/s Bhima SSK Ltd. Versus Commissioner of Central Excise, Pune-III

The Appellate Tribunal CESTAT MUMBAI ruled that Service Tax is not payable on Goods Transport Agency (GTA) services for transporting sugarcane when no ... GTA service - whether Service Tax is payable on the GTA services for transportation of sugarcane from it's farmers to the Sugar Mills when there no consignment note was issued for such transportation? - Held that: - A similar issue has been decided by this Tribunal in the appellant's own case Bhima Sahakari Karkhana Ltd Versus CCE, Pune-III [2015 (10) TMI 627 - CESTAT MUMBAI], where this Tribunal held that in absence of consignment note, services cannot be considered as GTA service and accordingly, Service Tax cannot be levied - appeal allowed - decided in favor of appellant. Issues involved: Whether Service Tax is payable on GTA services for transportation of sugarcane when no consignment note was issued.Analysis:The main issue in the present case revolves around the liability of Service Tax on GTA services for transporting sugarcane without the issuance of a consignment note. The Tribunal referred to a previous decision in the appellant's own case where it was established that without a consignment note, the services cannot be categorized as GTA services, leading to the conclusion that Service Tax cannot be imposed in such circumstances. The Tribunal highlighted the significance of a consignment note in determining the nature of services provided by a Goods Transport Agency under the relevant sections of the Service Tax Act. It was emphasized that mere transportation of goods without a consignment note does not constitute the service provided by a GTA, as defined under the law. The absence of consignment notes in the transportation of sugarcane by individual truck owners was a crucial factor in determining the applicability of Service Tax. The Tribunal held that without the issuance of consignment notes or other required documents as per the Service Tax Rules, the transporters cannot be classified as Goods Transport Agency, thereby exempting the appellant sugarcane mills from Service Tax liability.In the detailed analysis provided by the Tribunal, it was reiterated that the essence of a consignment note is pivotal in defining the services offered by a Goods Transport Agency and determining the liability for Service Tax. The Tribunal examined the provisions of the Service Tax Act, specifically Sections 65(105)(zzp), 65(50a), and 65(50b), along with Rule 4B of the Service Tax Rules, 1994, to establish the necessity of a consignment note in the transportation of goods by a GTA. The Tribunal emphasized that the absence of consignment notes, GRs, or other prescribed documents indicated that the transportation services provided did not fall under the purview of a Goods Transport Agency as defined by the law. The decision highlighted the distinction between simple transportation and the comprehensive services offered by a GTA, which includes not only transporting goods but also delivering them to the consignee and temporary storage until delivery. By applying the principles derived from the statutory provisions and relevant case law, the Tribunal concluded that without the issuance of consignment notes, the transportation of sugarcane by individual truck owners did not attract Service Tax liability, thereby ruling in favor of the appellant sugarcane mills based on the established legal principles and precedents.In conclusion, the judgment by the Appellate Tribunal CESTAT MUMBAI addressed the issue of Service Tax liability on GTA services for transporting sugarcane without the issuance of consignment notes. By analyzing the legal provisions and precedents, the Tribunal established that the absence of consignment notes rendered the services ineligible for Service Tax imposition, as they did not align with the definition and requirements set forth for Goods Transport Agency services under the Service Tax Act. The decision reaffirmed the importance of compliance with statutory provisions and documentation requirements in determining the tax liability for transportation services, ultimately resulting in the setting aside of the impugned order and allowing the appeal in favor of the appellant based on the established legal principles and interpretations.