AI Drafter 
TaxTMI 
TaxTMI 
2024 (4) TMI 1038
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....ding to company's various godowns as well as to their own godowns and also managing the transportation & delivery of the said goods from the godowns to Company's various dealers, stockists and to the individual customers as per the instructions issued by the company. At times, they also managed the transportation of the goods (Freight Forwarding) directly from Railway Siding to the Customer's end. 2.2 To carry out the above activities, the assessee entered into two agreements. One as 'Handling Agent Agreement' dated 28.05.2015 and the other as 'Transport Agreement' dated 28.05.2015. 2.3 As per the 'Handling Agent Agreement' scope of work is as under:- "B. The Company requires an agent i. To handle the arrival of the material such as unloading, loading, security, etc. at Rake point/Railway siding/Railway platform and subsequently to transport the material from rake point/railway siding/Railway Platform to the respective Godowns. ii. To take care of Cement handling at the Company's Godown as Specified in this Agreement. C. The Handling Agent is having necessary professional experience, expertise, resources, man power and infrastructure to....
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....n when these services were procured by C & F agent. Accordingly, no fresh liability of service tax can be imposed on the Appellant as UTCL as already discharged applicable service tax under reverse charge in accordance with the provisions of Finance Act and Rules. • Similar is stated in CBEC Circular B-11/1/2002/TRU dated 01.08.2002. • The extended period of limitation is not invokable in the present case on account of the fact that the M/s UTCL was discharging service tax under the reverse charge and also the question involved interpretation of law. Further, the whole exercise would also be revenue neutral in view of available credit to the M/s UTCL on the service tax paid by the Appellant. Accordingly, the demand for January, 2013 to March 2013 was also pleaded to be time barred. 3.4 Learned Departmental Representative reiterated the findings of the impugned order. 4.1 We have considered the impugned order along with the submission made in appeal and during the course of arguments. 4.2 Demand has been confirmed against the appellant both on merits and by holding that extended period of limitation would be invokable in the present case. For holdi....
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....ransportation of goods from railway siding to the stockiest / dealer / end customer of M/S UTCL. On going through the Annexure-l to said agreement, I find that M/S UTCL has fixed the rate of transportation for different destinations in terms of per metric tons in unit i.e. the Noticee has been given at the fixed rate (Rs. per metric ton) for different destinations which has been decided in the agreement. In addition to this consideration, the Noticee has received Rs.12/- per metric ton as service charges which is clearly mentioned in the Annexure-l of the Handling Agent Agreement. Now coming to the contention of the Noticee that they have provided GTA Service to M/s UTCL and M/s UTCL has paid Service Tax on the amount of "Freight Reimbursement" under reverse charge mechanism. However, I do not find any merit in the contention of the Noticee for following reasons. The Noticee is charging some extra consideration as "Service Charges" over and above of transportation charges. As per Section 658(26) a "Goods Transport Agency" means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called. Goods Tran....
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....most appropriated category of taxable service i.e. the valuation of the taxable service will be carried out in the service which is most essential as it is necessary in the case of bundle service. Therefore, I am of the view that secondary transportation is a part and parcel of clearing and forwarding agent service rather of GTA service. The claim of Noticee is also examined via-a-vis definition of Clearing &Forwarding Agent Services as quoted below:- Section 65(25) of the Finance Act, 1994 provides the definition of Clearing &Farwarding Agent Service as below:- (25 ) "clearing and forwarding agent" means any person who is engaged in providing any service elther directly or indirectly, connected with the clearing and forwarding operations in any manner to any other person and includes a consignment agent. On plain reading of the above definition, I find that in the definition the expression 'directly or indirectly' has been used to cover all cases where the service provider deploys other person for some of the functions coming under the service. As discussed at the previous pages; the Notice has carried out following functions:- (i) Clearing:- me....
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....time allowed. Wharfage;- the use of a wharf for mooring, loading, or unloading a ship, or for storing goods. In normal course, the railways charge the demurrage on delayed unloading of wagons at platform i.e. demurrage is charged by railways due to failure to unloading of wagons within time prescribed. Wharfage is charged by the railways due to non loading .of goods stored at platform within time i.e not cleared the platform within stipulated time limit. As for as the Noticee's contention that they have received the 'Miscellaneous Expense reimbursed' from M/S UTCL for the amount paid for demurrage and wharfage to railways on behalf of M/S UTCL and this amount is not taxable as they have received this amount from M/S UTCL as reimbursement of expenditure which they have paid to railways in the capacity of pure agency. I do not find any merit in the contention of the Noticee. In this regard I would like to reproduce the Section 67 of the Finance Act, 1994:- SECTION [67., Valuation of taxable services for charging service tax- (1) ..... In view of explanation to Section 67, consideration includes reimbursable expenditure also for th....
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....egarding the rules of construction that should be followed in determining whether a provision of law is directory or mandatory may be summarized thus. The fact that the statue uses the word "shall" while laying clown a duty is not conclusive on the question whether it is mandatory or directory provision, In order to find out the true character of legislation, the court has to ascertain the object by which the provision of law in question has to subserve and its design and the context. In which it is enacted. If the object of a law is to be defeated non-compliance with it, it has to be regarded as mandatory. But when a provision of law relates to the performance of any public duty and the invalidation of any act one is disregard of that provision causes serious prejudice to those for whose benefit it is enacted and at the same time who have no control over the performance of the duty, such provision should be treated as directory one. Where, however, a provision of law prescribes that a certain act has to done in a particular manner by a person in order to acquire a right and it is caupled with another provision which confers an immunity on another when such act is not done in that ....
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....The Noticee has also claimed benefit of cum-tax as prescribed under proviso 2 of Section 67 of the Finance Act, 1994. Section 67(2) reads as under;- (2) Where the gross amount charged by a service provider, for the service provided or to be provided is inclusive of service tax payable, the value of such taxable service shall be such amount as, with the addition of tax payable, is equal to the gross amount charged. On perusal of Section 67 of the Finance Act, 1994, it can be observed that whenever the gross amount charged for providing any service is inclusive of Service Tax, then the benefit of cum-tax-value is available to the Noticee. In the instant case, the Noticee has claimed that they have not charged the Service Tax on the amount received by them towards freight reimbursed and hence benefit of cum-tax-value should be available to them. However, in this regard, I find that the Noticee has not substantiated its contention with concrete documentary evidences such as all the invoices issued in respect of freight reimbursed. Further, the Noticee has also failed to prove that the Service Tax has not been collected by way of Debit / Credit Notes from the ....
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....cipal M/s UTCL such as 'Demurrage Charges' and 'Wharfage Charges'. These charges were levied by Railways and Receipts/Bills were issued in the name of M/s UTCL. The Appellant paid and recovered only the amount that was paid to the Railways. Clause 3.6, 3.8 and 15 of 'Handling Agent Agreement' dated 28.05.2015 contains the terms and conditions in respect of payment of such charges and reimbursement thereof. These were accounted for in the books of account of the Appellant under the head 'Miscellaneous Expenses Reimbursed'. 4.5 The dispute in this case is for the inclusion of freight amount in the value of C & F service for which a separate agreement has been entered into with the principal, which we do not consider legally tenable. In the case of Gunesh India Pvt. Ltd [(2023) 6 Centax 58 (Tri.-Del)] in similar type of arrangement with M/s Ultra Tech Cement Ltd Delhi Bench has held as follows: "3. The Appellant is engaged in the business of providing different services to M/s. Ultratech Cement Ltd. (for short 'Ultratech') and to other service recipients. The activities of the Appellant carried out during the relevant period are divided into the following categorie....
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.... by the company to load the cement against orders of customers as per the instructions of company officer. In case, any truck of customer is placed, than the same will also be loaded as per the company's instructions. Admittedly, under this agreement the appellant have deposited the service tax on the full value of consideration and there is no dispute in this regard. 20. We further find, as regards the transportation agreement dated 27/09/2014 between Ultratech Cement Ltd and the appellant, wherein the appellant is engaged to undertake only pure transportation activity of cement bags from one place to another. The scope of work as provided in the para-2 of the agreement (RUD-2), provides that the appellant shall place trucks for transportation of consignment of the company from railway platform/shed/godown to the various destinations including those of dealers/stockist/individual customers as per the company's instructions on regular basis. The transport work shall be mainly carried out to different places in Rajasthan from Mata ka Than godown under Jodhpur depot. The list of specified destinations is as per the approved freight list forming part of the agreement.....
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....r observed that site formation and cleaning service was brought into tax net w.e.f. 16/06/2005 and GTA service w.e.f. 01/01/2005 from which dates, the appellant was paying service tax. The Tribunal held that there is no justifiable reason to hold that the two services shall form part and parcel of 'cargo handling service'. Accordingly, the appeal was allowed, the said judgement was further carried in appeal before Hon'ble Supreme Court, the Hon'ble Supreme Court upheld the order of this Tribunal reported at 2015 (39) S.T.R. J 370(S.C.)." The demand in terms of the above decision which is squarely on the same set of facts have been set aside both on the merits and also limitation. 4.6 Relying on various past precedents Ahmedabad Bench has in case of Kalpataru Power Transmission Ltd. [2021 (48) G.S.T.L. 354 (Tri. - Ahmd.)] observed as follows: "6.7 This is not a case where the service provider i.e. appellant and the service recipient i.e. EDAs have colluded and with intention to evade service tax entered into two contract one for supply of goods and other for providing service of erection, installation and commissioning of transmission line. In the bid ....
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....0 From the above judgments it can be seen that reliance on the tender or invitation to bid to decide the nature of the contract or the right and obligation flowing under a contract entered pursuant thereto is wholly misplaced, which would be governed only by the contracts entered into two between the parties. In the present case even though there is single bid that contain the condition of separate contract for supply of goods and supply of service. The two separate contracts are correct and legal and the same cannot be clubbed and held that it is a composite contract. The bid/tender is only a offering to the prospective contracts however, the contract is an agreement between two parties and which is recognized as a legal document therefore, when two separate contract are entered into between two separate parties, revenue cannot insist that there should be one composite contract. Therefore, we are of the clear view that even though there is single bid/tender, the two separate contracts are legal and correct and no question can be raised. In the following judgments the issue in question was considered : • State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd. - (1958) ....
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....scope of the work included handling and internal transportation of stores materials such as plant, machinery, equipments, etc. at the plant site including crushing of coke breeze meant for Visakhapatnam Steel Plant, job contract for miscellaneous works awarded from time to time, supply of LCVs and packing of materials for transportation. Thus, a number of services are required to be provided by the appellant. While handling of stores materials along with internal transportation might merit classification under cargo handling service in the light of the decision of Hon'ble High Court of Orissa in the case of Coal Carriers (supra), other activities such as crushing of coke breeze, job contracts for miscellaneous works awarded from time to time, etc. would not come under the purview of cargo handling service. Similarly, supply of LCVs would also not come within the purview of cargo handling service. We have also pursued some of the invoices raised by the appellant on the service recipient which describes the activities as transportation and the payment is made to the appellant based on the quality of goods transported. Similarly, the appellant has provided labour for undertaking misce....