TaxTMI 
TaxTMI 
2026 (6) TMI 114
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.... at Tuticorin Port, was subjected to audit scrutiny wherein the Department noticed that the appellant had arranged transportation of cargo for M/s. Aspinwall & Co. Pvt. Ltd. and paid freight charges without discharging service tax under the reverse charge mechanism applicable to GTA services. Alleging that the appellant was the person liable to pay freight under Rule 2(1)(d)(v) of the Service Tax Rules, 1994, audit objections were raised to which the appellant stated that it acted only as a subcontractor to M/s. Aspinwall & Co. Pvt. Ltd., that consignment notes were issued by Aspinwall and that service tax on transportation charges had already been paid by Aspinwall. Though the Department had already examined the same arrangement in earlier proceedings initiated vide show cause notice dated 03.12.2009, a fresh Show Cause Notice No.15/COMMR/ST/2012 dated 19.10.2012 was issued invoking the extended period for the period 2007-08 to 2011-12. The adjudicating authority, by the impugned order, rejected the subcontractor defence, held the appellant liable as a Goods Transport Agency/person liable to pay freight and confirmed the demand with interest and penalties. 3. Aggrieved by the i....
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.... Excise reported in 2021 (55) G.S.T.L. 397 (Mad.) to contend that the adjudicating authority wrongly imported the post-01.07.2012 definition of "person" into the pre-negative list regime. 5.1 The Ld. Authorized Representative Shri Sanjay Kakkar for the Revenue supported the impugned order and submitted that the appellant admittedly engaged transporters, paid freight charges and arranged transportation of goods. Therefore, they squarely fall within the ambit of Rule 2(1)(d)(v) read with Notification No.36/2004-ST. 5.2 It is argued that the appellant paid freight to transporters and therefore became the "person liable to pay freight". According to Revenue, once the appellant made freight payment, the liability under reverse charge automatically attached to them irrespective of subcontracting arrangement. 5.3 Revenue further submitted that the appellant failed to produce documentary evidence conclusively establishing that Aspinwall had discharged service tax on the exact freight amounts in dispute. The undertaking letters produced by the appellant were stated to be insufficient. 5.4 The Department also contended that the appellant did not disclose GTA transactions in ST-3 ....
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....ocumentary evidence on record, including the agreement between the appellant and M/s. Aspinwall & Co. Pvt. Ltd., Form 16A certificates, vessel-wise reimbursement statements, vehicle chits, weighbridge slips and freight cash receipts, consistently establishes that the appellant merely arranged vehicles and coordinated cargo movement on behalf of Aspinwall in connection with import/export consignments handled through Tuticorin Port. The vessel-wise reimbursement documents at pages 52 to 56 of the appeal records further indicate that freight amounts were reimbursed by Aspinwall to the appellant for transportation undertaken in relation to specific vessels and cargo movements, thereby demonstrating that the appellant merely incurred expenditure in a representative capacity on behalf of the principal contractor. The records do not indicate that the appellant independently dealt with customers, issued consignment notes or undertook carriage obligations in its own name. On the contrary, the materials on record consistently establish that Aspinwall remained the principal contractor who received work orders from customers, issued consignment notes, billed transportation charges inclusive of....
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.... circular, particularly when such interpretation would result in impermissible double taxation of the very same transportation activity. 14. The Show Cause Notice itself records in paragraph 4 that the appellant had produced undertaking letters from M/s. Aspinwall & Co. Pvt. Ltd. stating that service tax had been paid on the transportation charges. However, the notice proceeds to allege that the appellant "failed to produce any evidence to show that service tax on the transportation charges had been paid by M/s. Aspinwall & Co. (P) Ltd., Tuticorin." This allegation, in our considered view, cannot by itself justify confirmation of demand against the appellant without proper verification of the records of M/s. Aspinwall & Co. Pvt. Ltd. Once the appellant had specifically disclosed the subcontracting arrangement and produced undertaking letters asserting payment of service tax by the principal contractor, the burden shifted upon the Department to verify the records of Aspinwall before proceeding against the appellant. The records further reveal that Aspinwall had specifically informed the appellant that service tax on transportation charges relating to cargo movement from Port to G....
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....ce the present proceedings also arise from the very same contractual arrangement and factual matrix already examined by the Department in the earlier round of litigation. 18. The principles emerging from Evergreen Suppliers and the appellant's own case reported in 2021 (55) G.S.T.L. 313 (Tri.-Chennai) clearly establish that once the Department was informed about the subcontracting arrangement and discharge of service tax by M/s. Aspinwall & Co. Ltd., it was duty-bound to verify the records of the principal contractor before proceeding against the appellant. The said decisions further show that in interpretational disputes involving subcontractor liability and revenue neutrality, wilful suppression cannot be readily alleged. Significantly, the Tribunal in the appellant's own case had already rejected invocation of the extended period on the very same factual arrangement. 19. We also find force in the appellant's contention that the adjudicating authority erroneously imported the post-01.07.2012 definition of "person" under Section 65B(37) into the pre-negative list regime. The Hon'ble Madras High Court in Cuddalore Municipality v. Joint Commissioner of GST & Central Excise rep....
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..... Thus, as early as 2008 itself, the Department was placed in possession of the entire factual matrix concerning the appellant's relationship with M/s. Aspinwall & Co. Pvt. Ltd. 23. Subsequently, the Department issued Show Cause Notice No.06/COMMR/ST/2009 dated 03.12.2009 concerning cargo handling/business auxiliary services arising out of the same contractual arrangement between the appellant and Aspinwall. In those proceedings also, the Department specifically examined the appellant's role as subcontractor and the billing arrangement adopted by Aspinwall. The appellant has also relied upon the decision of this Tribunal in their own case reported in M/s. Vinoth Shipping Services v. Commissioner of Central Excise & Service Tax, Tirunelveli, 2021 (55) G.S.T.L. 313 (Tri.-Chennai), arising from the said show cause notice, wherein the Tribunal rejected invocation of the extended period and penalties after recording that the appellant had throughout maintained that service tax had already been discharged by M/s. Aspinwall & Co. Pvt. Ltd. on the full consideration collected from customers. 24. The aforesaid findings assume considerable significance since the present show cause noti....