The Delhi bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) has ruled that the absence of a consignment note invalidates the service tax claim for the Goods Transport Agency ( GTA ).
The appellant Mr. Sitaram Jaggnath Prasad Sihotia was running a petrol pump outlet under the dealership of M/s Bharat Petroleum Corporation Limited (hereinafter known as BPCL), which was outside the purview of service tax. Further, the appellant also owns a commercial vehicle which is used for transportation of diesel/petrol from the premises of BPCL to various filling stations.
According to the appellant, since the services provided by them are covered by Section 68(2) of the Chapter V of the Finance Act, 1994 read with Notification No. 30/2012-ST dated 20.06.2012 whereby service receiver is liable to pay service tax under reverse charge mechanism, hence it did not take service tax registration and also did not file any service tax return
The Income Tax Department observed that the appellant received a certain amount during the period 2012-13 on which TDS was deducted under Section 194C of the Income Tax Act, 1961. It further revealed that service of GTA was provided by the appellant to M/s BPCL as the appellant had provided the truck/tanker for supply of petroleum products and during the period 2012-13, the appellant received Rs. 13,67,340/- but did not pay the service tax thereon. Show Cause Notice dated 20.04.2018 was issued proposing recovery of service tax amount of Rs. 1, 69,003/- under proviso to Section 73(1) and penalty under Section 77 and 78 of the Finance Act, 1994.
The bench found that the main thrust of the argument of the counsel for the appellant is that no service tax is chargeable as one of the basic ingredient as per the provisions of the Finance Act, 1994 to constitute “Goods Transport Agency” was that the service provider has to issue “Consignment Note” is missing and the Tribunal in catena of decisions have held that issuance of Consignment Note is prerequisite for taxability under GTA services. The tribunal have categorically laid down the law that in absence of consignment note services cannot be considered as GTA services and the demand of service tax under the category of “Goods Transport Agency” does not sustain
A single member bench of the tribunal comprising Binu Tamta ( Judicial member) found that it was an undisputed position that the appellant had not issued any consignment notes by whatever name and hence in view of the law laid down by the series of decisions, no service tax liability can be imposed.
Therefore, it was held that the demand proposed in the show cause notice for recovery of service tax of Rs. 1,69,003/- along with interest and penalty was dropped and the impugned order was set aside. The appeal was accordingly allowed.
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