Custom, Excise & Service Tax Tribunal
M/S Saswad Mali Sugar Factory Ltd vs Commissioner Of Central Excise, ... on 11 November, 2016
IN THE CUSTOMS, EXCISE AND SERVECE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. I APPEAL NO. ST/85239 & 85190/13-Mum (Arising out of Order-in-Appeal No. P-III/RP/231/2012 dated 17.10.2012 passed by the Commissioner of Central Excise (Appeals), Pune.) For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) =====================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ===================================================== M/s Saswad Mali Sugar Factory Ltd. Appellant Vs. Commissioner of Central Excise, Pune-III Respondent Appearance: Shri Anand S. Kulkarni, Advocate for Appellant Shri A.B. Kulgod, Assistant Commissioner (A.R.) for Respondent CORAM: HONBLE SHRI M.V. RAVINDRAN, MEMBER (JUDICIAL) HONBLE SHRI C.J. MATHEW, MEMBER (TECHNICAL) Date of Hearing: 11.11.2016 Date of Decision: 11.11.2016 ORDER NO. Per: M.V. Ravindran:
These two appeals are directed against Order-in-Appeal No. P-III/RP/231/2012 dated 17.10.2012 passed by the Commissioner of Central Excise (Appeals), Pune.
2. The relevant facts that arise for consideration are whether the appellant is required to pay Service Tax on Goods Transport Services during the period from 01.04.2005 to 31.10.2006 as service recipient under reverse charge mechanism, interest thereof and whether the penalty is imposable. Both the lower authorities has came to a conclusion that appellant/assessee is liable to discharged the Service Tax liability with interest but the first appellate authority has set aside the penalty imposed by invoking the provision of Section 80 of the Finance Act, 1994. Appellant/assessee as well as Revenue are in appeal against such order.
3. Heard both sides and perused the records.
4. Learned Counsel on behalf of the appellant/assessee submits that appellant is not required to discharge the Service Tax liability as has been held by the Tribunal in the case of Nandganj Sihori Sugar Co. Ltd. Vs. Commissioner of Central Excise, Lucknow [2014 (34) STR 850 (Tri.-Del.)]; Bhima Sahakari Sakhar Karkhanba Ltd. Vs. Commissioner of Central Excise, Pune-III [2016 (41) STR 438 (Tri.-Mumbai)].
5. Learned departmental representative submits that the appellant has received the services of Goods Transport is undisputed and during the relevant period in question Service Tax liability needs to be discharged by recipient of the services. On department appeal it is the submission that having come to a conclusion that Service Tax liability needs to be upheld, the first appellate authority should have also upheld the penalty under Section 78 of the Finance Act, 1994.
6. We have considered the submissions made at length by both sides and perused the records.
7. The issue that arises for consideration in this appeal is whether the appellant/assessee is required to discharge the Service Tax liability on the inward freight paid by them to the lorry owners who transported the sugarcane from farmer to sugar factory under the category of Goods Transport Agency services or otherwise.
8. It is undisputed that the appellant is sugar factory and covered under the notification which mandated for discharge of Service Tax liability by them on the services received from goods transport agency. However, in the facts of the case in hand, it is noticed that undisputedly the appellant/assessee have paid the inward freight charges to individual truck owner, who transported sugarcane from farmer to their factory. It is also undisputed there was no consignment notes issued by the said truck owners. On the above factual matrix, we find that the learned Counsel the appellant/assessee has correctly relied upon the decision of Tribunal in the case of Nandganj Sihori Sugar Co. Ltd. (supra). The ratio of the said judgment is in paragraph no. 6 which we respectfully reproduce.
6.?In terms of Section 65(105)(zzp), the taxable service means any service provided to a customer, by a Goods Transport Agency, in relation to transport of goods by road in a goods carriage. In terms of Section 65(50a) ibid Goods Carriage has the meaning assigned to it in clause 14 of Section 2 of the Motor Vehicle Act, 1988. In terms of Section 65(50b), Goods Transport Agency means any commercial concern which provides service in relation to transport of goods by road and issues consignment note, by whatever name called. The Service Tax has been demanded from the Appellants as service recipient under Rule 2(l)(d)(v) of the Service Tax Act, 1994 read with Notification No. 35/2004-S.T., dated 3-12-2004, on the payments made by them to transporters against the fortnightly bills being presented by them. While admittedly no consignment notes or GRs have been issued by the transports, according to the Department the Transporters bills are in the nature of the consignment notes. Under Rule 4B of the Service Tax Rules, 1994, any Goods Transport Agency which provide service in relation to transport of goods by road in a goods carriage shall issue a consignment note to the customer. In term of Explanation to Rule 4B, Consignment Note means - a document issued by Goods Transport Agency against the receipt of goods for the purpose of its transport by road in a goods carriage, which is serially numbered and contains the name of consignor and consignee, registration number of the goods carriage in which goods are transported, details of goods transported, details of the place of origin and destination, person liable for paying Service Tax whether consignor, consignee or Goods Transport Agency. Thus mere transportation of the goods in a Motor Vehicle is not the service provided by a Goods Transport Agency. A Goods Transport Agency in terms of its definition under Section 65(50b) provides service in relation to transportation of goods under a consignment note which should have the particulars as prescribed in explanation to Rule 4B. In the present case admittedly no consignment notes have been issued. The fortnightly bills cannot be treated as consignment notes, as a consignment note issued by Goods Transport Agency represent its liability to transport the consignment handed over to it to the destination and deliver the same to the consignee and merely a bill issued for transportation of goods cannot be treated as Consignment Note. The fact of non-issue of consignment to M/s. Nandganj is admitted in the show cause notice itself. In case of M/s. Bajpur though it is not mentioned in the show cause notice, this plea has been made by the Appellant and the same has not been refuted. The transportation of goods by individual truck owners without issue of consignment note, GRs & billties, etc. as prescribed in Rule 4B of the Service Tax Rules, would be simple transportation and not the service of Goods Transport Agency which involves not only undertaking the transportation of the goods handed over to it but also undertaking delivery of the goods to the consignee and also temporary storage of the goods till delivery. When the transports did not issue consignment notes or GRs or Challans or any documents containing the particular as prescribed in Explanation to Rule 4B of the Service Tax Rules, 1994, the Transporters cannot be called Goods Transport Agency and, hence, in these cases, the service of transportation of sugarcane provided by the transporters would not be covered by Section 65(105)(zzp). In view of this we hold that there will be no Service Tax liability on the appellant sugarcane mills, as they have not received the service from a Goods Transport Agency. In view of this the impugned orders are not sustainable and the same are set aside. The appeals filed by M/s. Nandganj and M/s. Bajpur are allowed. As regards the Revenues appeal, since it has been held that there is no Service Tax liability of the Appellants, there would be no merit in it and the same is dismissed. The above said ratio was followed by this Bench in the case of Bhima Sahakari Sakhar Karkhanba Ltd. (supra), Nandganj Sihori Sugar Co. Ltd. Vs. Commissioner of Central Excise, Lucknow [2016 (42) STR 545 (Tri.-All.)], Bazpur Co-operative Sugar Factory Ltd. Vs. Commissioner of Central Excise, Meerut-II [2012 (27) STR 517 (Tri.-Del.)] and South Eastern Coal Fields Ltd. Vs. Commissioner of Central Excise, Raipur 2016 (41) STR 636 (Tri.-Del.). As the facts in that case is similar to the fact in case in hand, we do not find any reason to deviate from such a view already taken. Accordingly the appellant/assessees appeal to the extent it is challenged before us is allowed and to that extent impugned order is set aside.
9. As regards Revenues appeal, we find that the Revenue is aggrieved by setting aside of the penalty by the first appellate authority. Since we have held in favour of appellant/assessee on merits itself, nothing survives in the appeal filed by the Revenue. Accordingly, Revenues appeal is rejected.
10. In sum appellant/assessees appeal is allowed and Revenues appeal is rejected.
(Operative portion of the order pronounced in open Court) (C.J. Mathew) (M.V. Ravindran) Member (Technical) Member (Judicial) Sp 6 APPEAL NO. ST/85239 & 85190/13-Mum