Customs, Excise and Gold Tribunal - Bangalore
Bharathi Soap Works And Ors. vs The Commissioner Of Customs And Central ... on 14 September, 2007
Equivalent citations: [2008]12STJ6(CESTAT-BANGALORE), 2008[9]S.T.R.80, [2007]13STT196
ORDER S.L. Peeran, Member (J)
1. All these six appeals pertain to common question of law and facts and hence, they are taken up together for disposal as per law. The appellants have been heard by Commissioner (A) and has passed the order. The simple question before the Commissioner (A) was whether the appellants were liable to discharge Service Tax in the absence of the transporter issuing consignment note.
2. The appellants prayed for clarification from the Assistant Commissioner. The Assistant Commissioner by his letter dated 20.12.2005 clarified that "it is the responsibility of the goods recipient to receive the goods in proper form i.e., consignment note. If you fail to take the consignment note, action will be initiated against you for violation of Rule 4(B) of Service Tax Rules, 1994". He further clarified that "any documents used for freight incurred either as a consignor or consignee will be the basis for purpose of payment of Service Tax". He further stated that "you are requested to pay Service Tax as you fall under the specified categories of persons mentioned in Notification No. 35/2004 dated 3.12.2004. Failure to pay Service Tax will attract penal provisions and action will be taken as per Rules".
2.1 Against this clarification, the appellants went in appeal before the Commissioner (A) and contended that the transporters were illiterate persons and they were not in the habit of issuing consignment note. They contended that this is not a tax on freight incurred or on services rendered by truck operators. They further argued that freight incurred in the following cases is not attracted.
(i) Consignors deliver their goods to the consignee on trucks arranged by them with a letter of advice to pay freight charges to the truck driver, and consignee pay freight charges to the driver on a voucher.
(ii) Truck operators call on appellants for loads. They do not issue consignment notes.
(iii) Way-side suppliers arrange trucks are not commercial concern or do not issue consignment note.
They further contended that in such cases, there are no goods booking services is involved and truck operators are suppliers or consignors as the case may be, are not goods transport agency or their employees. They contended that they do not issue consignment note as defined in Rule 4(B) of Service Tax Rules, 1994. Hence, the transport operator's services do not fall under the scope of goods transport agency as defined in Sub-Section 50(b) of Section 65 of the Finance Act, and hence not taxable.
2.2 The Departmental representative contended before the Commissioner (A) that the person making payment towards freight is liable to pay Service Tax in case the Consignor or Consignee of the goods transported falls in any of the categories specified in Notification No. 35/2004 dated 3.12.2004. He stated that taking of proper documents for payment of duty is the responsibility of the assessee concern. The Commissioner (A) after due consideration gave his findings in Para 5, which is reproduced herein below.
5. I have carefully gone through the case records and the submissions made by the appellants, including those urged at the time of personal haring. I find that issue of consignment note is mandatory in the case of transportation of goods from anywhere to anywhere. The goods are not transported free of charge. The goods are transported to some profit. Once the freight is charged on the transportation of goods, commercial activity takes place. Thus, it can be said that it is a commercial concern. Therefore, I find that the adjudicating authority had rightly demanded the service tax. I do not find any infirmity in the orders passed by the lower adjudicating authority. Therefore, I pass the following order.
ORDER The appeal filed by the appellant is dismissed. The order passed by the Assistant Commissioner, Customs and Central Excise, Guntur Division, in C. No. IV/16/6/2005-S. Tax dated 20.12.2005, is upheld.
3. I have heard learned Counsel and JDR in the matter.
4. The learned Counsel submitted that the small transporters are not in a habit of issuing consignment note or bills or Challans as defined in Rule 4(B) of Service Tax Rules and hence, they have difficulty in discharging, Service Tax. He prays for remand of the matter so that he can again express the difficulties of the appellants.
5. The learned JDR opposed the prayer and contended that issue of consignment note is mandatory irrespective of a transporter being illiterate/literate or big/small. He submits that everyone is bound by law and ignorance of law is no excuse.
6. I have carefully considered the submissions and I find that in these appeals there is no question of any computation of the Service Tax or any dispute pertaining to amounts to be quantified or required to be paid. The appellants only sought clarification from the Assistant Commissioner pertaining to the non-issue of consignment note by the transporters. The Assistant Commissioner clearly clarified that it is mandatory under Rule 4(B) of Service Tax Rules for issue of documents. The appellants are not contesting the fact that they are the persons who are required to discharge the Service Tax. They are finding difficulty in getting the consignment note or bills or Challans as defined under Rule 4(B) of Service Tax Rules.
6.1 On a careful consideration, I find that these appeals do not have any merit at all. All the statutory provisions which are mandatory are required to be strictly followed by tax payees. The administrative difficulties, illiteracy or any such inconvenience cannot be a ground for non-following of the statutory provisions. The transporters are bound to issue the consignment note or Bills or Challans as defined in Rule 4(B) of Service Tax Rules or any other serially numbered bills. Failure to do so would be a violation of law. The appellants, if they are finding difficulty in getting the consignment bill, then they should engage only those transporters who follow the law. I do not find any merit in these appeals and the same are rejected.
(Pronounced and dictated in open Court)