2018 (7) TMI 24 - AT - Service Tax

Tribunal rules absence of consignment notes nullifies service tax claim

M/s. Carris Pipes and Tubes Pvt. Ltd. Versus Commissioner of Central Excise, Coimbatore III Division

The Tribunal ruled in favor of the appellants, holding that the absence of consignment notes from individual transporters meant the services availed did ... GTA Service or not - freight charges for transport of their goods - main contention put forward by the appellant is that they had availed the services of individual transporters/truck owners - Held that:- On perusal of the documents, it was found that that it does not contain any detail with respect to the goods consigned. These vouchers were nothing but documents for monitoring the payment of freight charges to the transporter and can, in no way, be construed as a consignment note. It does not, therefore, evidence the receipt of goods by the consignee, but merely the details of the vehicle, trip and the freight charges paid. The same cannot be called a consignment note as under Section 65(50b) of the Finance Act, 1994. Demand do not sustain - appeal allowed - decided in favor of appellant. Issues:Service tax liability on freight charges for transport of goods without consignment notes.Analysis:1. The appellants, engaged in manufacturing water storage tanks, did not pay service tax on freight charges for transporting goods, leading to a Show Cause Notice for tax demand, interest, and penalties. The original authority and Commissioner (Appeals) upheld the demand. The appellant argued that services availed did not fall under Goods Transport Agency as consignment notes were not issued by individual truck owners used for transport.2. The appellant contended that since local truck owners did not issue consignment notes, the services availed did not meet the definition of Goods Transport Agency under Section 65(50b) of the Finance Act, 1994. The Department relied on vouchers for payment, claiming them to be consignment notes. The appellant cited a previous case to support their argument.3. The respondent supported the order, stating that documents provided by the appellants, termed as 'lorry running details,' could be considered as consignment notes. The appellant's printed cash vouchers were argued to meet the definition of a consignment note, even when services were provided by individual truck owners.4. The main issue revolved around whether the services availed by the appellants constituted Goods Transport Agency services due to the absence of consignment notes from individual transporters. The Tribunal analyzed the documents and found that the vouchers did not contain details of the goods consigned, thus not qualifying as consignment notes under the Act.5. Referring to a previous case, the Tribunal highlighted that the absence of consignment notes from transporters did not align with the definition of Goods Transport Agency. The Tribunal rejected the reasoning that monitoring slips or challans issued by the appellant could replace consignment notes to establish tax liability.6. Citing precedents, the Tribunal emphasized that the absence of consignment notes meant the transporter could not be classified as a Goods Transport Agency. The decision in a similar case reiterated that slips or challans for monitoring payment of freight did not equate to consignment notes.7. Following the precedent set in previous cases, the Tribunal concluded that the demand for service tax on freight charges without consignment notes was not sustainable and set aside the demand, allowing the appeal with consequential reliefs.8. The judgment was pronounced in open court, granting relief to the appellant based on the analysis of the absence of consignment notes in the transportation of goods, leading to the rejection of the service tax demand.