2019 (7) TMI 959 - AT - Service Tax

Appellant wins tax challenge over consignment notes, clarifies GTA service liability.

M/s All Cargo Global Logistics Limited Versus Commissioner of Central Goods & Service Tax, Customs & Central Excise, Bhopal

M/s All Cargo Global Logistics Limited Versus Commissioner of Central Goods & Service Tax, Customs & Central Excise, Bhopal - TMI Issues:1. Upholding of demand confirmed by the Original adjudicating authority2. Applicability of service tax under Goods Transport Agency Services3. Scope of show cause notice and demand confirmation4. Liability under reverse charge mechanism5. Interpretation of consignment note requirement for Goods Transport Agency Services6. Applicability of extended period for demand confirmation7. Imposition of interest and penaltyAnalysis:1. The appellant challenged the impugned order-in-Appeal upholding the demand confirmed by the Original adjudicating authority. The financial records showed payments made to transporters for goods transportation, triggering a demand for service tax under the Finance Act, 1994. The appellant contended that they were discharging service tax for other services, and the demand under Goods Transport Agency Services was beyond the scope of the show cause notice.2. The appellant argued that the truck owners providing services did not fall under Goods Transport Agency Services, thus no service tax was leviable under the reverse charge mechanism. Citing relevant notifications and circulars, the appellant claimed that the demand was based on amended provisions not applicable during the disputed period of 2008-09.3. The appellant highlighted that the impugned orders confirmed demands not part of the show cause notices, exceeding the scope thereof. The appellant, as a service provider, had paid service tax but disputed the demand as a service recipient under the GTA service. Legal precedents were cited to support the argument against the demand confirmation.4. The Department sought to tax the transportation charges under Goods Transport Agency Services, emphasizing the absence of consignment notes from the transporters. The appellant's explanation clarified the nature of services provided, indicating that the absence of consignment notes exempted them from the GTA service tax liability.5. The definition of Goods Transport Agency was crucial in determining the tax liability, requiring the issuance of consignment notes for services to be covered under GTA. Since the appellant did not issue consignment notes for all transport services, they were not liable to pay service tax under the reverse charge mechanism or fall under the GTA category.6. Considering the absence of consignment notes and the appellant's compliance with tax obligations, the impugned order was set aside, and the appeal was allowed. The judgment emphasized the importance of consignment notes in determining tax liability under Goods Transport Agency Services.7. The ruling clarified the interpretation of consignment notes and their significance in determining tax liability under the GTA service, providing a favorable outcome for the appellant based on the absence of consignment notes in their transactions.