2015 (5) TMI 107

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....ty imposed under Section 76 of the Finance Act, 1994 was dropped. 2. The fact of the case is that the appellant availed taxable services for supply of their goods to the consignee. They paid the freight to the transporter and took the reimbursement of transportation expenses from the consignee. The demand of service tax was confirmed by the adjudicating authority on the ground that as per Rule 2(1)(d)(v) of the Service Tax Rules, 1994, the service tax is liable to be paid by the consignor or the consignee who pays or liable to pay the freight. In the present case, admittedly the freight was paid by the appellant though subsequently they have taken the reimbursement from the consignee. The appellant preferred an appeal before the Commissi....

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....ct that the freight was admittedly paid by the appellant to the transporter and the appellant is clearly covered under the category, who is liable to pay the service tax as per Rule 2(1)(d)(v) of the Service Tax Rules, 1994. Therefore, irrespective of any arrangement between the consignor and the consignee, the person who pays the freight is legally liable to discharge the service tax liability. 4.1 As regards the judgment in the case of S.R. Drugs (supra) relied upon by the learned counsel for the appellant, the learned AR submits that it is a Single Member Bench judgment and countering the same, he has placed reliance on the Division Bench judgment of this Tribunal in the case of Essar Logistics Ltd. vs. CCE, Surat reported in 2014 (33....

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....Rule 2(1)(d) above and if that person pays the freight towards the GTA services, he is that person who is liable to discharge the service tax. In the present case, it is undisputed fact that the GTA services were provided by the transporter for transportation of the goods to the appellant through its consignee. For the said GTA services it is the appellant who has paid the freight to the transporter. Under these facts there is no doubt that the appellant being a consignor is liable to discharge the service tax. As regards the submission of the learned counsel that though they have paid the freight to the transporter but there was an understanding that the freight was to be borne by the consignee and, therefore, they have taken reimbursement....