2017 (10) TMI 557

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....after referred to as the assessee) are engaged in the manufacture of Soda Ash, Ammonium Chloride etc. They obtained service tax registration for payment of service tax on Goods Transport Agency (GTA) Services in the capacity of recipient of GTA Services. Assessee had purchased raw materials namely, Salt, Coal and Lime from various places and had apparently paid transportation charges along with the cost of the materials and charges for loading and unloading of the goods. It appeared to the department that the assessee had not paid the service tax on GTA for the period from January 2005 to October 2006. Accordingly proceedings were initiated vide issuing of Show Cause Notice proceedings demanding of different tax amounting to Rs. 83,10,029/-....

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....  Total 70,35,983 12,74,046 83,10,029 (ii) In respect of salt, it is contended that freight element for delivery of salt is part of the sale price of salt, though indicated separately. The vendor was obligated to deliver salt at the factory gate of the appellants. The service tax liability under GTA services category has been discharged alongwith interest by the appellants under Rule 2 (1) (d) (v) of the Service Tax Rules read with Notification No.35/2004-ST dated 03.12.2004. These facts have been informed by the appellants during adjudication process. According to them, the total tax liability in respect of salt will only be Rs. 12,58,584/- on road freight alone, since no GTA is payable on rail freight. Out of this tota....

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....32,66,456/- pertaining to GTA on coal transportation, a sum of Rs. 12,74,046/- is for transportation of coal through railways, on which there can be no service tax liability. (v) In respect of lime, here also the contract is turnkey. The purchase order was for import of lime. Thereafter there was a separate work order with M/s. Sical Logistics Ltd. to work as clearing and forwarding agent. Hence, contract is not for transportation, but for clearing and forwarding which the tax liability will have to be paid only by M/s. Sical Logistics. (vi) The proceedings are also hit by limitations, after audit was conducted at the premises of the assessee on 4.7.2005 and 30.1.2006. However, Show Cause Notice issued only on 21.2.2007. Hence extende....

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.... also claim to have discharged bulk of the tax liability that would arise only in respect of transport by road. According to them, the actual tax liability in respect of salt would only be Rs. 12,58,584/-, against which they have already discharged (partly by the vendors) the amount of Rs. 9,71,323/- and interest liability thereon of Rs. 1,03,532/-. The remaining tax liability on coal and lime will not arise, according to the appellant, since they had entered into contract for supply of the same with Clearing and Forwarding Agencies and accordingly tax liability on GTA would not arise. 8. In light of the above submissions, we are of the considered opinion, that the entire adjudication needs to be revisited to confirm or otherwise the ver....