TaxTMI 
TaxTMI 
2025 (7) TMI 1779
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....so reimbursed by its customers. 3. The Appellant is a Public Sector Undertaking engaged in the manufacture of Boilers, Valves etc., and is also engaged in the erection and commissioning of power plants, Boilers etc., and also rendering various services and paying service tax under forward charge for various taxable services like Erection, Commissioning and Installation service, Maintenance & Repair services, Works Contract services, etc. and are also registered under RCM and paying service tax as service receiver under reverse charge for some services like Goods Transport Agency Service. The recipient of the Transportation Service is Nabinagar Power Generating Company Pvt Ltd. (NPGCL) which is a Joint Venture between NTPC and Bihar State Electricity Board. 4.1 During the Audit of accounts of the appellant, and on scrutiny of the financial records, it was noticed that the Appellant had not paid service tax on the income received on account of facilitation of freight. Information was called for from the appellant regarding the payment for freight. In response, the appellant informed that they have received an amount of Rs.87,82,58,742/- and Rs.23,86,84,057/- during the periods ....
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....cies and pay Service Tax under reverse charge mechanism. ii. That the demand of Service Tax is confirmed vide the impugned order on the contract price towards transportation, collected by BHEL from their customers, on the ground that BHEL have rendered the service of "arranging transportation". iii. That as per Section 66 D (p) of the Finance Act, 1994, services of transportation of goods, except by a GTA and courier agency are not leviable to Service Tax. The appellant is not a GTA, as per the definition of the term. Hence, the demand of Service Tax on the appellant is without the authority of law. iv. It is their contractual responsibility to transport the goods to project sites, for which purpose they engage various GTAs. The customers do not have any privity of contract with the GTAs as the responsibility of transportation is that of the Appellant and they have arranged transportation and paid for transportation charges. Have these transport charges been paid directly by the customers to the transport operators and the appellant would have received only service charges / commission, which is not the case here. The entire transportation cost is paid to....
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....V Nepa Ltd [2013 (298) ELT 225(Tri-Del)] d. ONGC Vs Collector of Central Excise, Vadodara [1995 (79) ELT 117(Tri-Del)] e. Rajasthan Renewable Energy Corp. LTD v Comm. of C.Ex. Jaipur I [2017 (51) STR 269 (Tri-Del)] f. Rajasthan State warehouse Corp Vs Commr of Central Excise Jaipur [2011 (23) STR 385 (Tri- Del)]. 6. 1 The Ld. Authorized Representative Mr. Anoop Singh has supported the findings of the impugned order dated 20.09.2021 and prayed for dismissing the Appeal filed being lacking in merit. 6.2 In his written submissions, he has elaborated that the activities rendered are local transportation port clearance charges, insurance for equipments and spares, etc., and that negative list includes only services by way of transportation of goods except GTA services. 6.3 He has further contended that "services by way of transportation of goods by road except the services of a GTA" should not be interpreted as "services in relation to transportation of goods by road except the services of a GTA" Or "Services directly and indirectly in relation to transportation of goods by road except the services of a GTA". The word 'in relation to' is a very ....
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....d in Finance Act, 1994 by Finance Act, 2012 and got notified to be effective from 1st July 2012. The negative list of services under service tax implies two things:(1) a list of services which will not be subjected to service tax; (2) other than the services mentioned in the negative list, all services will be taxable which fall within the definition of 'services. 9.2 As per Section 66D (p) (i) of Finance Act 1994, Services by way of transportation of goods -(i)by road except the services of -(A)a goods transportation agency; or (B) a courier agency is covered under the negative list of services. 9.3 However, with respect to the activity of arranging transportation of goods by the appellant themselves, we observe that the appellant admittedly is not a Goods Transport Agency. We also observe that with effect from 1st July, 2012 the concept of nomenclature of services has been done away and every activity has been made taxable except those which are mentioned in section 66D of the Finance Act (Amendment Act of 2012). The period in question is post the said amendment. 9.4 Since admittedly, the appellant is neither the GTA, nor the Courier agency hence, the activity of transpo....
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.... completion of facilities, conducting performance guarantee tests and handling over to employer of the Equipment/Materials including Mandatory spares for SG Package 9.6.2 From the contract we find that M/s. BHEL as a whole is responsible for execution of both the contracts to achieve successful completion of the project and it is the responsibility of BHEL to transport the equipment to the project site. Any breach in any part of the First Contract shall be treated as a breach of the Second Contract, and vice versa. The scope of work as per the above referred contracts is for completion of the entire project. The Corporate office New Delhi would in turn allocate the responsibilities to different units of BHEL by issuing an Internal Order with specifications of work to be done by each unit and the contract price allocation is done in Delhi. 9.6.3 It can be seen that the Appellant has dispatched the goods to the client site as per the contract terms and collected the transport charges involved thereon. Along with the transportation, admittedly they have also performed i.e., unloading, handling, storage and insurance. Apart from that wherever and whenever it is required, they hav....
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....and the service tax from the Noticee as Goods Transport Agency since the demand of Service Tax is not maintainable at law there is no question of interest and penalty thereon." Similarly, in respect of the Ranipet Unit, the Principal Commissioner of GST & Central Excise, Chennai Outer vide Order-in-Original No. 29/2022 dated 30.06.2022 dropped the demand in respect of freight income. 11.1 Further, Rule 4B of Service Tax Rules, 1994 mandates issue of consignment note by any goods transport agency which provides service in relation to transport of goods by road in a goods carriage to the recipient of service. We have noted the appellant's contention that they have not issued any Consignment note and so cannot be termed as GTA but provided transport services on behalf of the recipient which was paid by the Appellant on RCM basis and later on got reimbursed as laid down in the LOA. There is a difference between the transportation charges paid and freight charges reimbursed. The reimbursement is on the expenditure incurred by them and said to be lower than what was incurred as discussed in the impugned order. 11.2 Further the Appellant has submitted that transportation is a bun....
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....We also observe that with effect from 1st July, 2012 the concept of nomenclature of services has been done away and every activity has been made taxable except those which are mentioned in section 66D of the Finance Act (Amendment Act of 2012). The period in question is post said amendment. Hence in light of the above facts section 66D is perused. We observe that sub-clause (p) of Section 66 D records the services by way of transportation of goods by road except the services of : (i) A Goods Transport Agency (ii) A Courier Agency. Since admittedly the appellant is neither the GTA, nor the Courier agency hence, the activity of transportation of goods by road by them is well covered under the aforesaid provision. The amount in question is an amount towards facilitation of freight and insurance by the appellants themselves. The said perusal of section 66 D (p) in itself is sufficient to hold that the service tax on the said amount has wrongly been demanded. The order to that extent is therefore liable to be set aside." 7. The facts and the issue in the present case are identical and, therefore, following the aforesaid final order, the impugned order needs to be set aside and ....
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.... the recipient and provider of service are Govt Entities/PSU and the dispute is with another arm of the Government on the issue of leviability of service tax. Further it is a pure interpretational issue and therefore the Suppression cannot be adduced against the Appellants. We agree with the contentions of the appellant that the issue was mired in litigation and interpretation of law; the undisputed fact is also that the appellant is a public sector undertaking and so are their recipients and hence, there is no scope to allege suppression with an intention to evade tax. No malafides can be attributed to the Appellant on this score that too when they discharged service tax on GTA service. Further this issue was already raised in the various units of the sister concerns during Audit and notices were issued and some were dropped during Adjudication and some in Appellate Forums covering various tax periods. Therefore, it cannot be said that the information is not in the knowledge of the Department and therefore the fact that the issue would not have come to light but for the Audit intervention is not correct. 13.4 We find that when that entire demand of tax is based on the figures /....