AI Drafter 
TaxTMI 
TaxTMI 
2012 (4) TMI 827
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....the Constitution is as to the effect of notification dated 27.2.2010, issued by the Government of India (P-10), which included transport service concerning "food grains and pulses" in the list of exempted items from the service tax leviable under Section 66 of the Finance Act, 1994 (for brevity, 'the Act'). In other words whether the petitioners would be obliged to pay 'service tax' to respondent Food Corporation of India under the terms of contract or their obligation under the contract would come to an end after 27.2.2010. The facts have been referred from CWP No. 15974 of 2011. 2. The petitioners have prayed for quashing communications dated 11.4.2011 (P-11) and 9.6.2011 (P-13). By those communications it has been decided that the ....
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....of tender documents/contracts. The first one is meant for Mandi Labour/Mandi Transportation Contract, which they have entered into as a result of award of contracts to them (P-4). The second pertains to appointment of loading, unloading and handling transportation contract at FCI godowns and rail heads, which does not pertain to the petitioners and meant only for the Handling and Transportation Contractors (HTC). The HTC contractors are also required to carry out transportation within the local area. However, as per the said contract no service tax is deducted from the payments made to Handling and Transport Contractors against the transportation within the local area. The amount of service tax in such cases is paid by the FCI at its own le....
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....es. However, in the case of the petitioners, the respondents started deducting the amount of service tax from their transportation bills for the year 2009-10, as per details given in Annexure P-7. The petitioners protested against deduction of service tax from their bills and one such representation dated 30.4.2009 is placed on record (P-8). Thereafter, according to the petitioners the deductions on account of service tax were stopped during the financial year 2010-11. But in the financial year 2011-12 i.e. after extending the period of contract, the respondents again started the deductions. 6. On 3.12.2004, a notification under Section 93(1) of the Finance Act was issued by the Central Government exempting payment of whole of service ta....
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....ondents have directed its regional offices to strictly implement the impugned circular dated 11.4.2011, vide impugned communication dated 9.6.2011 (P-13). 7. In the written statement filed on behalf of the respondents the factual position has not been denied. The only assertion made is that till the notification dated 27.2.2010 (P-10) was issued by the Central Government, service tax was used to be deducted from the payments of the petitioners and deposited with the Government. Thereafter, the amount equivalent to the element of the service tax was continued to be deducted as the service tax was part of the rate and, therefore, the Food Corporation of India has to recover that part of the rate from the petitioners as they are not entitle....
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....by road in a goods carriage from the whole of service tax leviable thereon under Section 66 of the Act. It did not include 'food grains and pulses'. The notification dated 27.2.2010 (P-10) amended the notification of 3.12.2004 (P-9) and added 'food grains and pulses' in the list of exempted items. Therefore, it must be concluded that goods transport service provided by a goods transport agency to a customer in relation to transport of 'food grains and pulses' by road in a goods carriage were exempted from payment of 'service tax' with effect from 27.2.2010 (P-10). Therefore, the stipulation in the tender notice (P-1) requiring the contractors to pay 'service tax' came to an end and there is no subsisting obligation to pay 'service tax' to t....