Custom, Excise & Service Tax Tribunal
Startrek Logistics Private Limited vs Commissioner Of Central Tax, Bangalore ... on 23 April, 2025
ST/21906/2018; ST/20186/2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL
BANGALORE
REGIONAL BENCH - COURT NO. 2
Service Tax Appeal No. 21906 of 2018
(Arising out of Order-in-Original No.BLR-NORTH-COMM-04/2018-19
dated 06.09.2018 passed by the Commissioner of Central Tax,
Bengaluru.)
Startrek Logistics Private Limited
(Also known as Spoton Logistics Pvt. Ltd.) Appellant(s)
No.23/24, "Thanavan", 1st Floor,
Infantry Road,
Bangalore - 560 001.
VERSUS
The Commissioner of Central Tax
GST Bangalore North Commissionerate,
No.59, HMT Bhavan, Ganga Nagar,
Respondent(s)
Bellary Road, Bangalore - 560 032.
WITH Service Tax Appeal No. 20186 of 2022 (Arising out of Order-in-Original No.BLR-NORTH-COMM-07/2021-22 dated 26.07.2021 passed by the Commissioner of Central Tax, Bengaluru.) Startrek Logistics Private Limited (Also known as Spoton Logistics Pvt. Ltd.) No.23/24, "Thanavan", 1st Floor, Appellant(s) Infantry Road, Bangalore - 560 001.
VERSUS The Commissioner of Central Tax GST Bangalore North Commissionerate, No.59, HMT Bhavan, Ganga Nagar, Respondent(s) Bellary Road, Bangalore - 560 032.
APPEARANCE:
Shri Rishab Prasad, Shri Onkar Sharma, and Ms. Tanvi Advocates for the Appellant.
Shri Akshay Kumar, Superintendent, Authorised Representative for the Respondent.
CORAM:
HON'BLE MR. P.A. AUGUSTIAN, MEMBER (JUDICIAL) HON'BLE MRS. R. BHAGYA DEVI, MEMBER (TECHNICAL) Page 1 of 10 ST/21906/2018; ST/20186/2022 Final Order Nos. 20504 - 20505 /2025 DATE OF HEARING: 24.03.2025 DATE OF DECISION: 23.04.2025 PER : P.A. AUGUSTIAN The issue in the present appeals is whether the service availed by the appellant is falling under the category of Goods Transport Agency Service (GTA) and whether the appellant is liable to pay service tax under Reverse Charge Mechanism. The demand in the appeal No. ST/21906/2018 is for the period from 01.01.2012 to March 2015 and the Appeal No.ST/20186/2022 is for the period from April 2015 to June 2017. Appellant was carrying out Courier Agency service across India and on investigation it is found that the appellant has not paid appropriate service tax on Reverse Charge Mechanism for the GTA services availed by them. Accordingly, show-cause notice was issued and adjudicating authority as per impugned orders confirmed the demand under Reverse Charge Mechanism considering the service availed by the appellant as Transport of Goods by Road. Aggrieved by said order, present appeals are filed.
2. When the appeals came up for hearing, the learned counsel for the appellant drew our attention to the definition of GTA service and submits that the activity is not falling under the above category since appellant is not involved in transport of goods by road and the service provider has not issued any consignment note to consider the activity as falling under GTA Service. Learned counsel also drew our attention to the contract entered by the appellant and submits that the vehicle shall be used only to carry the appellant's goods and the contractor shall at no point of time carry or permit to carry any other goods in the vehicle. Appellant shall have the right to stop the transit of the consignment entrusted to the contractor and to take delivery or possession of same at any time against a proper receipt.
Page 2 of 10ST/21906/2018; ST/20186/2022 Learned counsel also submits that as per clause 7.6 of the agreement under no circumstances, the Contractor shall have the right to exercise any lien over the consignments entrusted to him for transportation in respect of any amounts due under this Agreement or any other dues and the Contractor hereby expressly waives all or any of his rights in this regard. In the event the Contractor tries to hold up the consignments entrusted or tries to exercise the lien over the consignments, the Contractor shall be liable to pay the total declared value of the Consignments entrusted to him per day, as liquidated damages to appellants calculated from the date the consignments were scheduled for delivery.
2.1 Learned counsel also drew our attention to findings in the impugned order and submits that the finding regarding issue of the Consignment note by the service provider is factually wrong. Learned counsel also drew our attention to the Consignment note which is issued by the appellant and submits that it is not issued by the contractor or truck owner to consider the service provided by the contractor or truck owner as falling under GTA services. The learned counsel further submits that though the contract is referred in the impugned order and relied as an admissible evidence, copy of the said document was not furnished to them and Revenue is also not in a position to produce the same during hearing. Learned counsel also submits that though the respondent is claiming that as per the definition of GTA, the issue of consignment note by whatever name is called can be treated as consignment note. But no such document is produced by the Revenue to consider whether such document is equivalent to consignment note. In the absence of any such document, the activity cannot be considered as falling under GTA services.
2.2 The learned counsel also submits that the issue was considered by Tribunal in similar cases and in the matter of Birla Ready Mix vs. CCE, Noida: 2013 (30) STR 99 (Tri.-Del.) it was held that :
Page 3 of 10ST/21906/2018; ST/20186/2022 "8. When consignment notes are not issued by the operator they cannot be considered as a "Goods Transport Agency". In this context we have also considered the provision in Rule 4A and also Rule 4B of Service Tax Rules, 1994 which stipulate that every "Goods Transport Agency" shall issue consignment note. This provision read with Section 65(50b) of Finance Act, 1994 as quoted above leads to a situation where the definition is dependent on a requirement laid down using the defined term itself and leads to difficulties in proper understanding of the matter. Since the provision of Act has to prevail we understand the definition at Section 65(50b) has to be understood independent of Rule 4B of Service Tax Rules, 1994 to decide whether the person concerned is a goods transport agency by adopting ordinary meaning of consignment note and then apply Rule 4B of Service Tax Rules, if the person concerned is found to be a goods transport agency.
9. We further note that service tax is levied on the services of a "Goods Transport Agency" and not on services of a "Goods Transport Operator". The latter term was used in Finance Act, 1994 during the period Nov., 1997 to June, 1998 and the former expression is being used now. So it is to be understood that these two expressions refer to different types of persons. The mere fact that the operator is doing activity of transportation cannot make the operator a "Goods Transport Agency". So the operators in this case cannot be considered as "Goods Transport Agencies". We are not in agreement with the argument of Revenue that the log-book maintained by the operators should be considered as equivalent to consignment note. The fact that part of the hire charges for the vehicles is being paid on the basis of number of kilometers run cannot alter the nature of the responsibility of the operators because such payment is consistent with a scheme of hiring the vehicle though it may be consistent with a contract for transportation of goods also. On the other hand a fixed charge per month for the vehicle is more consistent with a scheme of hiring the vehicle rather than a contract for transporting the goods. It is seen the contracts provide for such component of remuneration also.
10. Further this issue is already examined by the Andhra Pradesh High Court in the case of G.S. Lamba and Sons (supra) though in the context of State Sales Tax. The Court has held that this type of contract is one for transfer of right to use the vehicle rather than for providing service of transportation. We do not find any reason to take Page 4 of 10 ST/21906/2018; ST/20186/2022 a different view while examining the present matter which is in the context of service tax levy.
2.3 Learned counsel further submits that the issue is also considered in the matter of Chartered Logistics Ltd. vs. CCE:
(2024) 16 Centax 473 (Tri.-Ahmd.), where it was held that:
"6.5 Accordingly, a person can be said to be Goods Transport Agency, if the person provides services in relation to the transportation of goods by road and issues the consignment note. From the above legal position, it clear that not all the person who transport of goods by road are qualified as Goods Transport Agency. To qualify as services of GTA, the GTA should issue necessarily a consignment note then only services provided by the GTA are taxable under Finance Act, 1994. In the present matter it is admitted fact that in case of supply of transportation of goods services to M/s FCPL. Appellant have not issued any consignment notes. M/s FCPL issued consignment notes/LRs to consignee/consignor of goods. In such circumstance Appellant is not qualified under the Goods Transport Agency as per the above definition of GTA. Services of transportation of goods by a person other than GTA are clearly exempt under Section 66D (P)(i)(A) of the Finance Act, 1994. By observing the above legal position we find that the services of appellant is clearly excluded from the taxable services since it is covered in the "Negative List‟ Entry under Section 66D (p)(i) of the Finance Act, 1994."
3. Learned Counsel also submits that considering the finding in the said order, the consideration received by contractors / truck owners from appellant is only for supply of vehicles as per the contract and only the activity of transportation of goods was undertaken by appellant. Accordingly, the service provided by the truck owners to appellant cannot be considered as covered under "Negative List" of service to confirm demand of service tax from the appellant under Reverse Charge Mechanism. Learned counsel further submits that the above decision of the Tribunal was upheld by Hon'ble Supreme Court reported in 2024 (388) ELT 679 (SC). This issue was also considered by Dinshaws Dairy Foods Ltd. vs. CCE, Nagpur: 2018 (13) GTL 170 (Tri.-Mumbai) wherein it was held that when Appellant has Page 5 of 10 ST/21906/2018; ST/20186/2022 hired the vehicles on the kilometres basis and monthly bills are raised on the basis of Kilometres travelled by the Vans, the vehicles are hired on monthly basis and the charges are not based upon destination but on kms basis. It cannot be said that the services involved are of Goods Transport Agency. Therefore in such case no consignment note is issued as the vehicles run on the direction of Appellant. The charges are fixed not on the basis of destination or quantity of goods or any other basis but solely on kms the vehicles have run in a month. Obviously no consignment note is issued as the services is not of consignment to be taken to any particular destination and therefore the services would not fall under the category of Goods Transport Agency. The learned counsel also relied on the following decisions:
Lakshminarayana Mining Company vs. Commissioner of Central Tax: 2019 (27) GSTL 745 (Tri.-Bang.) Narendra Road Lines Pvt. Ltd.: 2022 (64) GSTL 354 (Tri.- All.) 3.1. The learned counsel further submits that demand is also unsustainable since this issue is of revenue neutrality and relied on the following decisions.
CCE vs. Coco Cola India Pvt. Ltd.: 2007 (213) ELT 490 (SC) CCE & C vs. Narmada Chematur Pharmaceuticals: 2005 (179) ELT 276 (SC) CCE vs. Special Steel Limited: 2015 (329) ELT 449 (Tri.- Mumbai) as affirmed in 2016 (334) ELT A123 (SC) 3.2. As regarding invoking the extended period of limitation, learned counsel relied upon the following decisions to support his submission that extended period of limitation is not sustainable. Nirlon Ltd. vs. CCE, Mumbai: 2015 (320) ELT 22 (SC) CCE vs. Tenneco RC India Pvt. Ltd.: 2015 (323) ELT 299 (Mad.) NCR Corporation India Pvt. Ltd. Vs. CCT, Bangalore North:
2021 (55) GSTL 6 (Tri.-Bang.) Page 6 of 10 ST/21906/2018; ST/20186/2022
4. Learned Authorised Representative drew our attention to the show-cause notice and submits that as per para 10.2.7 of the Agreement, it is stated that the contractor shall issue and deliver to noticee, contractors consignment note for the consignment picked up with the details of consignments, such as customer's invoice, number of package, product, weight and other details. Further, it is stated that the consignment note of contractor shall be conclusive evidence of the condition or of the correctness of the declared nature, quantity or weight or approximate value of the consignment at the time items received by the contractor. Learned Authorised Representative for the Revenue also relied on the decisions of the Tribunal in the matter of M.L. Agro Products Ltd. vs. Commissioner of Customs, Central Excise and Service Tax, Guntur: 2017 (6) GSTL 94 (Tri.-Hyd.) and submits that the Tribunal in the above matter held that:
"6.3 After hearing both sides, it appears that the main plea of the assessees on this issue is that no consignment notes have been raised. They have relied upon the ratio in the case of South Eastern Coal Fields Ltd. v. CCE, Raipur [2016 (41) S.T.R. 636 (Tri.-Del.)] where issue of consignment note has been held as a non-derogable ingredient for falling under GTA. But the fact remains that consignment notes can be issued in any form, as seen from definition of GTA in Section 65(50)(b) of the Finance Act, 1994; "goods transport agency" means any person who provides service in relation to transport of goods and issues consignment note, by whatever name called (emphasis added). In the Appeal No. ST/341/2011, sample vouchers/invoices have been made available, where the truck number, amount and load have been described. In the instant cases, the assessees are the service recipients for which they are paying the freight charges. When it is so, then we are of the view that the Department has rightly applied GTA and demanded the service tax for the reason that without an accompanying paper/document, goods cannot be received without which is the basis of amount for payment. This is also the view taken by the Tribunal in U.P. State Sugar Corporation v. CCE, Meerut-II [2011 (24) S.T.R. 423 (Tri.-Del.), it Page 7 of 10 ST/21906/2018; ST/20186/2022 would be worthy of reproducing relevant portion of the Tribunal's finding herein below :
"4. Ld. DR; on the other hand, supports the order of the authorities below. When we find that the first Appellate Authority appears to have rightly understood the matter in controversy, there is no quarrel on the consignment note to give any interim relief to the appellant. Consignment note may not necessarily be in any format since no such format is prescribed under law but the documents accompanying the goods identifying the consignor and consignee, route of consignment enable to construe what a consignment note is and the appellant's grievance that the consignment note was mandatory does not find support of law when fact and circumstances demonstrate route of goods moved disclosing identity of consignor and consignee and goods consigned."
Hence, we find no reason to interfere with the orders where service tax has been demanded under GTA. The same is sustained. On this point, the concerned appeals are dismissed."
5. In rejoinder, the learned counsel for the appellant submits that though the adjudicating authority has considered the contract, there is no such contract available on record and in the absence of such contracts on evidence, no reliance can be made. Learned counsel further submits that as per the judgment of the Hon'ble Supreme Court in the matter of Radha Sundar Dutta vs. Mohd. Jahadue Rahim and Others: AIR 1959 SC 24 wherein it was held that:
"If in a deed an earlier clause is followed by a later clause which destroys altogether the obligation created by the earlier clause, the later clause is to be rejected as repugnant and the earlier clause prevails. In this case the two clauses cannot be reconciled and the earlier provision in the deed prevails over the later."
6. As per the contract, it is the responsibility of the appellant to issue consignment note and as evident from the documents relied by the appellant, consignment note was issued by the appellant only. In the absence of any evidence regarding issue of Page 8 of 10 ST/21906/2018; ST/20186/2022 any consignment note or any other documents to consider it as consignment note, the ratio of the decision relied by the AR in the matter of M.L. Agro Products Ltd., (supra) is unsustainable. The contract was entered on a monthly basis and as evident from the bill issued by the truck owners, fixed charge of Rs.40,000/- is charged and same cannot be considered as consignment note and further, there is no such averments in the show-cause notice or in the impugned order to consider such bill as consignment note. Fact being so, in the absence of any admissible evidence regarding issue of consignment note or in any other form to consider as consignment note, no presumption can be drawn that the service availed by the appellant is falling under GTA service and to confirm the demand of service tax on Reverse Charge Mechanism.
7. Heard both sides. As per the impugned order, the demand is made on the ground that the service provided by the truck owner/contractor is falling under GTA services. However, as evident from the documents relied by the appellant, consignment note is issued by the appellant himself and if the said document is considered as a consignment note as stated in the definition of GTA services, the appellant himself is to be considered as providing GTA services. As regarding the finding relied by learned AR in the matter of M.L. Agro Products Ltd. (supra), sample vouchers/invoices have been made available, where the truck number, amount and load have been described. Considering the same, Tribunal took the view that the Department has rightly applied GTA and demanded the service tax. However, in present case there is no such documents in whatever name available on record to presume the same as consignment note. As held by the Tribunal in the matter of Birla Ready Mix (supra), when the consignment notes are not issued by the operator, they cannot be considered as a goods transport agency. As per the impugned order, service tax is made under the category of transport of goods by road under Section 65(105)(zzp) and not under Goods Transport Operator, the term Page 9 of 10 ST/21906/2018; ST/20186/2022 used in Finance Act, 1994 during the period from November 1997 to June 1998. As per the evidence on record, the contract is for transfer of right to use the vehicle rather than for providing service of transportation and hence cannot be considered as GTA service or under the category of transport of goods by road as held by the adjudicating authority. It is clear that to be called "goods transport agency" a person should fulfill two conditions, namely, he should provide service in relation to transport of goods by road and issue consignment note, by whatever name called and none of them are satisfied.
8. Accordingly, the impugned order is set aside and appeals are allowed with consequential relief, if any, as per law.
(Order pronounced in Open Court on 23.04.2025) (P.A. AUGUSTIAN) MEMBER (JUDICIAL) (R. BHAGYA DEVI) MEMBER (TECHNICAL) rv Page 10 of 10