Individual truck owners are out of purview of service tax on GTA services.

PJ/Case Laws/2012-13/1402

Case:-CAPS & PRINTS (P) LTD Vs COMMISSIONER OF SERVICE TAX, KOLKATA

Citation:-2013-TIOL-111-CESTAT-KOL

Brief facts:-Brief facts of the case are that appellant are manufacturer of excisable goods and alleged to have availed the services of goods transport agency (GTA) during the period from 01.01.2006 to 31.03.2008. Being consignor/consignee of the goods, the appellant were accordingly required to pay Service Tax as per Notification No.35/04-ST dated 03.12.2004 on the value of the GTA service availed by them. A show cause notice was issued to them for recovery of the Service Tax of Rs.23,707/- for the said GTA services availed during the relevant period. The adjudicating authority after considering the submissions advanced by the appellant had reduced the demand to Rs.15,451/- and imposed penalty of equivalent amount. Aggrieved, the appellant filed appeal before the Commissioner(Appeal), who, however, rejected their appeal. Hence the present appeal.

Appellant’s Contention:-Appellant had submitted that during the relevant period they have availed the services of various individual truck owners and drivers in transporting their finished goods from their factory and receipt of raw materials into their factory. They have never availed the services of any goods transport agency (GTA). Hence no consignment note was issued for transporting the goods out of or into their factory. Therefore, they were not liable to pay any Service Tax on the said transport services availed during the relevant period. On the aspect of their submission before the adjudicating authority, relating to freight charges of Rs.750/- incurred on certain consignment he had submitted that it was on the insistence of the Department, the said figure was submitted, but they had never accepted the liability to pay Service Tax on the transport charges more than Rs.750/- per consignment. All along they have been pleading before the Department that their services would never fall under the category of GTA Service as the transporters or individual truck owners or drivers were out of purview of GTA Service. Appellant relied upon the cases of CCE & C, Guntur vs. Kanaka Durga Agro Oil Products Pvt. Ltd. - 2009 (15) S.T.R. 399 (Tri.-Bang.) = (2009-TIOL-1123-CESTATBANG), Lakshminarayana Mining Co. vs. Comm. of S.T., Bangalore - 2009 (16) S.T.R. 691 (Tri.-Bang.) = (2010-TIOL-122-CESTAT-BANG) and Bellary Iron & Ores Pvt. Ltd. vs. Comm. of C. Ex., Belgaum - 2010 (18) S.T.R. 406 (Tri.-Bang.) = (2010-TIOL-704-CESTAT-BANG ).

Respondent’s Contention:-Respondent reiterated the findings of the Commissioner(Appeals). However, on verification of the transport bills he has fairly accepted that the services were rendered by individual truck owners, drivers and payments were accordingly made to the said service providers. Also, Respondent could not produce anything contrary to the decisions cited by the Consultant.

Reasoning of Judgment:-Undisputedly during the period from 01.01.2006 to 31.03.2008, the appellant had availed the services of transporters for transporting their goods from the factory and also bringing the raw materials into their factory who were owners of the vehicles. In support of the same they have produced the payment vouchers made to individual truck owners. From the said documents it is clear that they had not availed the services of goods transport agency (GTA) during such period. This Tribunal in the case of Bellary Iron & Ores Pvt.Ltd. cited (supra) at para 13 observed as follows:-

"13. In the circumstances, we hold that the impugned transactions, where the appellant availed service of transportation by goods carriages not operated by GTA as per our discussion are not liable to tax under the head Goods Transport Agency service."

Decision:-Appeal allowed with consequential relief.

Comment:-The analogy drawn from this case is that when individual truck owners are hired for transportation of goods, they cannot be considered as providing GTA service and so service tax cannot be levied on them because there is no agency relationship.

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PJ/Case Laws/2012-13/1402

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