Custom, Excise & Service Tax Tribunal
Vikas Construction Co vs Ahmedabad-Iii on 5 November, 2024
Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench at Ahmedabad
REGIONAL BENCH-COURT NO. 3
Service Tax Appeal No. 12259 of 2018 - DB
(Arising out of OIA-AHM-EXCUS-003-APP-0293-17-18 dated 10/05/2018 passed by
Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax-
AHMEDABAD)
Vikas Construction Co ........Appellant
Shop No. 17 & 18, Palika Bazar, Rajmahel Road,
Patan, Gujarat
VERSUS
Commissioner of C.E. & S.T.-Ahmedabad-iii ......Respondent
Custom House... 2nd Floor, Opp. Old Gujarat High Court, Navrangpura, Ahmedabad, Gujarat- 380009 APPEARANCE:
Shri Keyur Kamdar, Chartered Accountant for the Appellant Shri Anand Kumar, Superintendent (AR) for the Respondent CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON'BLE MEMBER (TECHNICAL), MR. C L MAHAR Final Order No.12583/2024 DATE OF HEARING: 30.09.2024 DATE OF DECISION: 05.11.2024 RAMESH NAIR The issue involved in the present case is that whether the appellant as a recipient of transport service is liable to pay the service tax under reverse charge mechanism under 'Goods Transport Agency Service' or otherwise.
1.1 In the present case the original authority vide Order-In-Original dated 22.12.2017 set aside the demand on the ground that in respect of the transportation service no consignment note was issued as the transport was done by the truck owners. However, the learned Commissioner (Appeals), in the appeal filed by the Revenue, vide impugned order, set aside the order-in-original and allowed the appeal of the Revenue on the ground that monthly bills raised by the truck owners are nothing but consignment notes and therefore the appellant is liable to pay service tax under reverse charge mechanism. Therefore, the present appeal filed by the appellant before this Tribunal.
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2. Shri Keyur Kamdar, Learned Chartered Accountant appearing on behalf of the appellant submits that in the present case the transport service was availed which was provided by the truck owners who have declared on the nonjudicial stamp paper that they have not issued any consignment note. He submits that in cases where consignment notes were issued by GTA the appellant have discharge the service tax. Therefore, only in case where there is no consignment note appellant have not paid the duty which is correct as per the law. He submits that the adjudicating authority has rightly dropped the demand as there was no consignment note. The Commissioner (Appeals) has given wrong findings that the monthly bill is a consignment note whereas the bill cannot be treated as consignment note for the reason that there are specific informations which should appear in the consignment note as per the rule. Whereas in the monthly bill all such details are not appearing, therefore, the bill cannot be treated as consignment note. Hence, the entire finding solely based on the monthly bill being a consignment note is not correct and legal. He placed reliance on the following judgments:-
Ultra Tech Cement Ltd. Vs. Commissioner of C. Ex. Kolhapur- 2018 (10) GSTL 80 (Tri.-Mumbai) Nandganj Sihor Sugar Co. Ltd Vs. Commissioner of Central Excise, Lucknow- 2004(34) STR 850 (Tri.-Del.)
3. Shri Anand Kumar, Learned Superintendent (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order.
4. We have carefully considered the submission made by both the sides and perused the records. We find that the entire issue falls under narrow compass that whether the adjudicating authority holding that no consignment note was issued dropped the demand or the Commissioner (Appeal) considering the monthly bill for transportation as consignment note confirmed the demand is correct or otherwise.
4.1 We find that it is an admitted fact that in respect of the transport service provided by the truck owners no individual consignment note was
3|Page ST/12259/20158 -DB issued for the transportation service. The service provider had issued monthly bill which the learned Commissioner (Appeals) has considered as consignment note. We completely disagree with the learned Commissioner (Appeals) for the reason that the consignment note itself connotes that the document has to be issued for each and every consignment that means for every trip if a document is issued which contains all the information as required under the law irrespective of any nomenclature the same can be accepted as consignment note. However, in the present case the monthly bill raised for the collection of charges by the service provider was treated as consignment note by the Learned Commissioner (Appeals) which is absolutely incorrect. The monthly bill is not a document which is issued for each consignment moreover the bill does not contain all the information as required under the law. Therefore, the entire confirmation of demand by the learned Commissioner (Appeals) based on the monthly bill cannot be sustained. This issue has been considered by this Tribunal in the case of Ultra Tech Cement Ltd (Supra) wherein this Tribunal on the identical issue has passed the following order :-
"4. We have carefully considered the submission made by both the sides, we find that in an identical case of appellant themselves this Tribunal has vide Order No. A/86183/2017/STB, dated 8-2-2017 in Appeal No. ST/412/2012-MUM passed following order.
"6. We have considered the submissions made by both sides and perused the records.
6.1 We find that the first appellate authority as well as the adjudicating authority have erred in coming to a conclusion that in this case the service tax liability arises.
6.2 It is seen from the records that the movement of cement clinkers from jetty to the manufacturing premises of the appellant is done by the trucks of two transport companies. It is also undisputed that cement clinkers is received at the jetty from the factories of the appellant. We find from the records that nowhere it is mentioned that these two transport companies issued consignment note either individually or jointly for the movement of the cement clinkers from jetty to the manufacturing premises of the appellant. It is noticed that the activity of transporting cement clinkers from jetty to the factory premises of the appellant is based upon the contract and perusal of such contract, we find that the said contract specifically states about transporting cement clinkers from jetty to manufacturing premises by these two transport companies. We find that as per Rule 4B of Service Tax Rules, 1994 the goods transport agency shall issue consignment note to the respondent in relation to transport of goods by road in a goods carriage. The said Rule 4B is reproduced :-
4B. Any goods transport agency which provides service in relation to transport of goods by road in a goods carriage shall issue a consignment note to the recipient of service.
4|Page ST/12259/20158 -DB Provided that where any taxable service in relation to transport of goods by road in a goods carriage is wholly exempted under section 93 of the Act, the goods transport agency shall not be required to issue the Consignment note.
Explanation. - For the purposes of this rule and the second proviso to rule 4A, "consignment note" means a document, issued by a goods transport agency against the receipt of goods for the purpose of transport of goods by road in a goods carriage, which is serially numbered, and contains the name of the consignor and consignee, registration number of the goods carriage in which the goods are transported, details of the goods transported, details of the place of origin and destination, person liable for paying service tax whether consignor, consignee or the goods transport agency.
6.3 It can be seen from the above reproduced Explanation to the Rule, consignment note should have specific particulars, the provisions of Section 65(50b) talks about the issuance of the consignment note. The interpretation placed by the lower authorities that any document by whatever name, needs to be considered as consignment note is misplaced as in this case the transporting companies have only raised invoices for transportation of cement clinkers as per the contract which did not satisfy the requirement of the consignment note and the responsibility cast for issuing the consignment note is not met to hold that Goods Transport Agency Services are rendered.
6.4 We find that an identical issue came up before the Tribunal in the case of Nandganj Sihori Sugar Co. Ltd. (supra) wherein the Tribunal after analyzing the provisions of the service tax liability on goods transportation agency under Finance Act, 1994 and reverse charge mechanism, in paragraph 6 has held as under :-
"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 Vehicles 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(1)(d)(v) of the Service Tax [Rules], 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 Transporter's 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
5|Page ST/12259/20158 -DB 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, GR's & 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 Revenue's appeal, since it has been held that there is no Service Tax liability of the Appellants, there would be no merits in it and the same is dismissed."
6.5 The abovesaid ratio would squarely covers the issue in the case in hand and accordingly we hold that the impugned order is unsustainable and is liable to be set aside and we do so.
7. The impugned order is set aside and the appeal is allowed."
In view of above Tribunal decision which has considered the same issue in length after analyzing the settled legal position and came to the conclusion that the appellant in respect of service in question, under the facts and circumstances not liable to service tax hence the appeal was allowed. Therefore the issue is no longer res integra. We, following the above judgment of Tribunal in appellant's own case, set aside the impugned order and allow the appeal."
4.2 In another case of Nandganj Sihor Sugar Co. Ltd (Supra) having identical facts that whether the bill should be treated as consignment note or otherwise, this Tribunal has passed the following order:-
"5. We have considered the submissions from both the sides and perused the records. The appellant incurred expenditure on transportation of sugarcane from the cane collection centers to their sugarcane mills and these charges were adjusted against the payment for sugarcane made to the farmers. The point of dispute is as to whether the transporters are Goods Transport Agency as defined under Section 65(50b) of the Finance Act, 1994 and whether the appellant as recipient of the service provided by the transporters would be liable to pay Service Tax in terms of the provisions of Rule 2(l)(d)(v) of Service Tax Rules.
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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 Transporter's 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, GR's & 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
7|Page ST/12259/20158 -DB 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 Revenue's 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."
As per our above discussion which is supported by above cited judgments, it is clear that in the present case there is absolutely no issuance of consignment note in respect transport service provided by the truck owners. We also hold that the monthly bill in the present case cannot be treated as consignment note. Therefore in absence of consignment note, the demand under GTA is not sustainable.
5. Hence, the impugned order is set aside. Appeal is allowed.
(Pronounced in the open court on 05.11.2024) (RAMESH NAIR) MEMBER (JUDICIAL) (C L MAHAR) MEMBER (TECHNICAL) Raksha