Custom, Excise & Service Tax Tribunal
Anushakti Chemicals And Drugs Ltd vs Commissioner Of Central Excise on 30 September, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad -ooOoo- Appeal No. : ST/328/2009 Arising out of OIA-387/RAJ/2009/COMMR-A-/RAJ dt 06/05/2009 passed by the Commissioner of Central Excise, CUSTOMS (Appeals)-RAJKOT Anushakti Chemicals And Drugs Ltd - Appellant(s) Vs Commissioner of Central Excise, CUSTOMS (Appeals)-RAJKOT - Respondent(s)
Represented by For Assessee : Shri J Surti, Advocate For Revenue : Shri S N Gohil, Authorised Representative For approval and signature :
Dr. D.M. Misra, Hon'ble Member (Judicial) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes CORAM :
Dr. D.M. Misra, Hon'ble Member (Judicial) Date of Hearing / Decision : 30/9/2016 ORDER No. A/11150 / 2016 dt 30/9/2016 Per : Dr D.M. Misra, Heard both sides.
2. This appeal is filed against OIA-387/RAJ/2009/COMMR-A-/RAJ dt 06/05/2009 passed by the Commissioner of Central Excise, CUSTOMS (Appeals)-RAJKOT.
3. The brief facts of the case are that the appellants are engaged in the manufacture of excisable goods and during the period June 2006 to July 2007, they have received raw materials from M/s Reliance Industries Ltd (RIL) and M/s IPCL Ltd against excise invoices. Alleging that the appellant had failed to pay Service tax on the freight charges(GTA service) paid by them for bringing the goods to their factory, demand notice was issued for recovery of Service Tax amounting to Rs 2,45,058/- alongwith proposal for imposition of penalty. On adjudication, the demand was confirmed alongwith equal amount of penalty. On appeal, the Ld Commissioner (Appeals) upheld the Order and rejected their appeal. Hence, the present appeal.
4. The Ld Advocate for the appellant submits that during the relevant period they have received raw-materials from M/s RIL and M/s IPCL under proper Central Excise Invoices. It is his contention that even though in the consignment note it was indicated that the liability to pay Service Tax was on consignee but the liability rests on the person who pays the freight charges under the reverse charge mechanism as prescribed under Rule 2(1)(d) (v) of Service Tax Rules 1994. In the present case, the consigner has paid the freight amount even though later recovered from them by issuance of debit note, hence, liability to pay Service Tax rests on the consignor. In support, he has referred the decision of Tribunal Rajalaxmi Paper Mills Pvt Ltd Vs CCE, Madurai 2011(22)STR.635 (Tri.Chennai) and Metal Seam Co Pvt Ltd Vs CCE, Lucknow 2013(31)STR.680 (Tri Del.).
5. The Ld AR for the revenue reiterated the findings of the Ld Commissioner (Appeals).It is submitted, that since the freight amount had ultimately borne by the appellant and the consignement note specifically makes an endorsement stating that liability to pay the Service Tax was on the consignee, hence, the demand of Service Tax, on GTA services received by the Appellant, was rightly confirmed against the appellant. In support, he has referred the decision of this Tribunal in the case of Essar Logistics Ltd Vs CCE, Surat - 2014(33) STR.588(Tri.Ahmd).
6. At the relevant time, persons liable to discharge service tax on GTA Service has been prescribed under Rule 2(d) of Service Tax Rules 1994 which reads as under:
[(d) person liable for paying the service tax means, -
(i).
.
(v) in relation to taxable service provided by a goods transport agency, where the consignor or consignee of goods is, -
(a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948);
(b) any company 11[formed or registered under] the Companies Act, 1956 (1 of 1956);
(c) any corporation established by or under an law;
(d) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India;
(e) any co-operative society established by or under any law;
(f) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (a of 1944) or the rules made there under; or
(g) any body corporate established, or a partnership firm registered, by or under any law, any person who pays or is liable to pay freight either himself or through his agent for the transportation of such goods by road in a goods carriage;]
7. A plain reading of the aforesaid provision, it is crystal clear that the person who pays or liable to pay freight either himself or through his agent for the transportation of such goods, and satisfy the conditions prescribed in (a) to (g) of Clause (v), are liable to discharge the Service Tax. In the present case, there is no dispute of the fact that the freight charge was initially paid by the consignor but later recovered it from the appellant by issuing debit note. In the Essar Logistics Ltd vs CCE, Surat (supra) following earlier judgment of the Tribunal in MSPL Ltd. Vs.CCE 2009 (13) STR 554, it is held that the person who pays the freight charges is liable to discharge the Service Tax. In the present case, the liability rests on the consignors as they had discharged the freight charges. In the result, I do not find any merit in the impugned order. Accordingly, the same is set is aside and the appeal is allowed with consequently relief, if any, as per law.
(Dictated and pronounced in the Court) (D.M. Misra) Member (Judicial) swami ??
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