Custom, Excise & Service Tax Tribunal
Tata Power Company Ltd vs Jamshedpur on 4 September, 2024
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH : KOLKATA
REGIONAL BENCH - COURT NO. 1
Service Tax Appeal No. 75403 of 2016
(Arising out of Order-in-Original: 02/S.Tax/Commr/2016 dated 12.01.2016 passed by
the Commissioner, Central Excise & Service Tax, 143, New Baradwari, Sakchi,
Jamshedpur - 831 001)
M/s. Tata Power Company Limited : Appellant
Jojobera Plant, Rahargora,
Jamshedpur
VERSUS
Commissioner of Central Excise and Service Tax : Respondent
143, New Baradwari, Sakchi,
Jamshedpur - 831 001
APPEARANCE:
Shri Gopal Mundhra, Advocate for the Appellant
Shri P. Das, Authorized Representative for the Respondent
CORAM:
HON'BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)
HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)
FINAL ORDER NO. 77019 / 2024
DATE OF HEARING / DECISION: 04.09.2024
ORDER:[PER SHRI K. ANPAZHAKAN] The instant appeal has been filed by M/s. Tata Power Company Limited (hereinafter referred to as 'the Appellant') against the confirmation of demand of Service Tax of Rs.85,95,403/-, along with interest, and equal amount of tax as penalty under Section 78 of the Finance Act, 1994 by way of the Order-in- Original: 02/S.Tax/Commr/2016 dated 12.01.2016.
2. Brief facts of the case are that the Appellant has thermal power generation plants at various locations in India. The Appellant uses coal for generation of steam in these power plants. Due to burning of coal, Page 2 of 9 Appeal No.: ST/75403/2016-DB ash gets generated which requires disposal as per environmental norms.
2.1. Disposal of ash involves various activities like excavation of ash from ash ponds, loading into trucks, transporting the same from plant to dumping grounds, liasoning with various Government Agencies for obtaining permission to transport and disposal of ash, etc. 2.2. The Appellant enters into contract with service providers for excavation of ash, loading and unloading, transportation and disposal of ash at designated locations and other ancillary activities. The work orders explicitly states that delivery challan and weighment slip (specifically recording the weight of the trucks in which ash is transported) is issued by the Appellant itself. The service providers engaged are then subsequently required to submit the copy of challan and weighment slip to the Appellant for payment of their monthly bills based on the distance travelled.
3. The Department contended that the appellant is liable to pay Service tax under the category of 'goods transport agency' service on reverse charge basis. Therefore, a Show Cause Notice was issued demanding service tax of Rs.85,95,403/-, for the period July 2009 to March 2013. The said Notice was adjudicated by the Commissioner, Jamshedpur vide the impugned Order-in-Original:
02/S.Tax/Commr/2016 dated 12.01.2016 , wherein the demands raised in the notice are confirmed along with interest and penalty. Aggrieved against the confirmation of the demands, the appellant has filed this appeal.Page 3 of 9
Appeal No.: ST/75403/2016-DB
4. The contentions raised by the appellant against confirmation of the demands are summarized below:
a) The primary allegation of the Department is that the challan prepared for the purpose of determination of consideration would constitute a 'consignment note' in terms of ST Rules. It is submitted that in the present case, the challan / weighment slip containing the details like quantity of goods, vehicle no., date of transportation, place of disposal etc., has been issued by the Appellant itself. The transporters only raise bills on monthly basis on the Appellant based on the respective challans issued to them during transportation. Thus, the challan / weighment slip issued by the Appellant cannot be construed as a 'consignment note' as the ingredients of Rule 4B of the Service Tax Rules are not satisfied.
b) The issue is no longer res integra; that once it is established that there is no document issued by the transporter in the nature of 'consignment note', the transportation activity cannot be termed as 'Goods Transport Agency service received by the Appellant. Any service of transportation of goods by road except GTA is exempt from Service tax.
4.1. The appellant has placed reliance on the following case-laws in support of the above contentions: -
• South Eastern Coal Fields Limited vs. CCE Raipur [2016 (8) TMI 677-CESTAT New Delhi=2017 (47) S.T.R. 93 (Tri.
- Del.)] • Mahanadi Coalfields Ltd. vs. CCE & Service tax, Bbsr [2019 (7) TMI 1803 - CESTAT] Page 4 of 9 Appeal No.: ST/75403/2016-DB • Kolkata CCE & ST, Dhanbad vs. Bharat Coking Coal Limited & Anr. [2022 (9) TMI 435-CESTAT, Kolkata] • Commissioner vs. JSW Logistics Pvt. Ltd. [2019 (22) GSTL 237 (Tribunal)] • Narendra Road Lines Pvt. Ltd. vs. CCU, C.Ex & CGST [2022 (64) GSTL 354 (Tri. All)] • East India Minerals Ltd. vs. CCE, Bhubaneshwar -II, [2020 (3) TMI 851-CESTAT Kolkata] • Nandganj Sihorl Sugar Co. Ltd. vs. Commissioner of Central Excise, Nagpur [2014 (34) STR 850 (Tri. Delhi)] • Birla Ready Mix vs. Commissioner Of Central Excise, Neida [2013 (30) S.T.R. 99 (Trl. - Del.)] • Shri. Prabhulingeshwar Sugar & Chemicals Ltd. vs. CCU, C.Ex. & ST, Belgaum, [2022 (64) GSTL 350 (Tri. Bang.)] 4.2. The appellant also submits that ash is not goods; it is a waste product which does not fetches any price for the Appellant at its disposal. They state that the activity of transportation was for disposal of ash and not for outward sale; that it is required to be disposed of at low-lying areas in terms of environment protection regulations. Therefore, it is contended that it cannot be said that there is transportation of 'goods' by the service provider. The following decisions were relied upon in support: -
• Gujarat State Fertilizers & Chemicals Limited vs. CCE, Vadodara [2015 (37) STR 1076 (Tri-Ahmd.)] • Panoli Enviro Technology Ltd. vs. CCE & ST Surat-II, [2023 (8) TMI 122 -CESTAT Ahmedabad] • ONGC Ltd. vs. CCE & ST, Tiruchirapalli [2018 (7) TMI 1671-CESTAT Chennai] 4.3. It is further submitted that extended period of limitation is not invokable as there is no suppression of facts, and the Department was in knowledge of the entire facts. It is pointed out that the appellant had specifically requested for clarification from the Department vide its letter dated 06.07.2009 on the Page 5 of 9 Appeal No.: ST/75403/2016-DB taxability of the transaction under goods transport agency service. Further, they contend that the issue is one of interpretation of statutory provisions and the Appellant entertained a bona fide belief that Service tax is not leviable on transportation services other than GTA. Therefore, it is their submission that the demand for the period July 2009 to March 2013 is barred by limitation.
4.4. The Ld. Authorized Representative of the Revenue reiterated the findings in the impugned order.
5. Heard both sides and perused the appeal documents.
6. We observe that the primary issue involved in the instant appeal is whether Service Tax is payable under the category of 'goods transport agency' under reverse charge mechanism in respect of the services provided without issuance of a 'consignment note' or not.
6.1. We find that the said issue is no more res integra as the same stands decided by this Tribunal in the case of South Eastern Coal Fields Ltd. v.
Commissioner of Central Excise, Raipur [2017 (47) S.T.R. 93 (Tri. - Del.)] wherein it has been held as under:-
"6. The admitted facts are that the appellants engaged various transporters/contractors for moving coal from pithead to railway sidings. These contractors do not issue 'consignment note' to the appellant. The appellant had issued slips with a view to keep the track of the goods for onwards transportation. We have perused one such slip which is issued at the loading point. The serial numbered form contained certain details like weight, date, etc. The admitted fact is that the consignor and consignee are one and the same and transporter of Page 6 of 9 Appeal No.: ST/75403/2016-DB goods is not issuing any consignment note. In such a situation, the original authority quoting "letter and spirit of the statute" observed that by not issuing consignment note the transporter had violated the provision of Rule 4B of the Service Tax Rules, 1994. We find that the reasoning followed by ld. Commissioner is devoid of merit. It is relevant to examine the concerned legal provisions :
Section 65(105)(zzp) of the Act defines the taxable service as under :
(zzp) to any person, by a goods transport agency, in relation to transport of goods by road in a goods carriage;
Section 65(50b) of the Act defines 'goods transport agency' as under :
(50b) "goods transport agency" means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called;
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. In the present case, admittedly, no consignment note was issued by the goods transporter. The original authority held that the slip/challans issued for monitoring purposes by the appellant (receiver of service) will satisfy such conditions and tax liability can be upheld. We are unable to understand or appreciate such reasoning. The original authority is creating an amalgamation of service provider and recipient to fit in the definition of Goods Transport Agency. In other words, the transport of coal is done by the transport contractor which satisfied the first condition but no consignment note being issued. The slip issued by the appellant as recipient of service is taken with such activity of transport to bring in tax liability. We find that such attempt is beyond the scope of law and without merit.
7. The matter has come up for decisions on earlier occasions by the Tribunal in Nandganj Sihori Sugar Co. Ltd. and Others v. C.C.E, Lucknow - 2014 (34) S.T.R. 850 (Tri.-Del.), it was held that the Goods Transport Agency in terms of its definition under Page 7 of 9 Appeal No.: ST/75403/2016-DB Section 65(50b) provides services in relation to transportation of goods and issues consignment note which should have particulars as prescribed in Explanation to Rule 4B.
8. In cases where admittedly no consignment notes have been issued, the said transporter cannot be called Goods Transport Agency. In Birla Ready- mix - 2013 (30) S.T.R. 99 (Tri.-Del.), it was held that the provisions of the Act has to prevail and the definition at Section 65(50b) has to be understood independent of Rule 4B of the Service Tax Rules, 1994 to decide whether the person concerned is a goods transport agency.
9. In Northern Coalfields Limited v. C.C.E., Bhopal vide Final Order No. 53313/2015, dated 29-10- 2015, an identical situation was examined by the Tribunal. There also, the payment slips were generated by the service recipient containing relevant particulars like truck number, weight, etc., for monitoring and paying contractors for their service. No consignment notes were issued by the transporter. The Tribunal held that as no consignment note as generally understood or delineated in Rule 4B was issued by the transporter to the appellant in the transaction the tax liability under GTA does not arise.
10. Ld. Counsel for the appellant also contested the demand on the question of time-bar. He submitted that the Board issued a draft Circular on 9-10-2006 regarding service tax liability on various activities in open cast mines. One issue in draft circular in transportation of coal from pithead to railway sides and its tax liability under GTA. The Board opined that such movement of goods within the premises of mines may not be covered under taxable service as there is no consignment note for such transportation. However, later when Final Circular was issued on 12-11-2007 there was no clarification on this issue by the Board. Ld. Counsel submitted this fact to emphasis that this was a clear case of interpretation regarding tax liability during relevant time. Hence, there can be no allegation of suppression of fact, etc., to invoke the extended period of limitation against the appellant. He submitted that on this ground alone substantial demand will be hit by time-bar.Page 8 of 9
Appeal No.: ST/75403/2016-DB
10. On careful examination of the issue as discussed above, we find that tax liability under Goods Transport Agency service cannot be sustained against the appellant. The ratio laid down by the Tribunal in various decisions discussed above are to be followed as there is no reason to differ with the same. We also note that appellant is correct regarding their contention on the issue of interpretation with reference to time-bar of the demand also.
11. In view of the above, we find that the impugned order is not sustainable and accordingly set aside the same. The appeal is allowed."
6.2. In this case, we observe that the appellant has not issued any 'consignment note'. Once it is established that there is no document issued by the transporter in the nature of 'consignment note', the transportation activity cannot be termed as 'Goods Transport Agency service received by the Appellant. We observe that the ratio of the above decision is squarely applicable to the facts of this case. Thus, by relying upon the decision cited supra, we hold that the demand of service tax from the Appellant under 'Goods Transport Agency' service on reverse charge basis is not sustainable. Accordingly, we set aside the demand of service tax confirmed in the impugned order. Since the demand itself is set aside, the question of imposition of any penalty does not arise. Therefore, the penalties imposed are set aside.
7. We also observe that extended period of limitation is not invokable, as there is no suppression of facts with intention to evade the tax established in this case. We find that the Department was in knowledge of the entire facts. We also observe that the appellant had specifically requested for clarification from the Department vide its letter dated Page 9 of 9 Appeal No.: ST/75403/2016-DB 06.07.2009 on the taxability of the transaction under goods transport agency service. Thus, most of the demand confirmed in the impugned order is not sustainable on the ground of limitation also.
8. In the result, the impugned order is set aside and the appeal filed by the appellant is allowed.
(Operative part of the order was pronounced in open court) Sd/-
(ASHOK JINDAL) MEMBER (JUDICIAL) Sd/-
(K. ANPAZHAKAN) MEMBER (TECHNICAL) Sdd