The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Delhi Bench ruled that no Service Tax is applicable on Transporter of Firewood as carting Challan is not a consignment note
The appellant, Mukesh Kumar Jaiswal was given the job of transportation of timber and other various products which also included loading and unloading charges. The appellant received an amount of Rs.33,94,556/- during the period 2013-14 to 2015-2016 on (after abatement) which it appeared to Revenue that Service Tax of Rs.1,11,667/- was chargeable. Accordingly, a show cause notice dated 28.9.2017 was issued along with a proposal to impose a penalty. The proposed demand was confirmed on contest along with an equal amount of penalty under section 78 and another penalty of Rs.10,000/- under section 77(1)(a) and late fee of Rs.1,20,000/- under Section 70 read with Rule 7C of Service Tax Rules.
The appellant had appealed before the Commissioner (Appeals), who upheld the demand of Service Tax observing that the cartage Challan issued by the Forest Department for transportation from inside the forest to the depot is in the nature of consignment note, and the appellant is also responsible to account for any shortage in the course of transportation. As the carting Challan is equivalent to consignment note and accordingly the appellant qualifies for the GTA and is thus liable to pay service tax. The Commissioner (Appeals) observed that a forest official has issued a carting Challan and the acknowledgement from the driver has been obtained. For haulage payment or transportation charges by forest department, as would be accompanied with Challan.
The coram of Judicial Member, Anil Choudhary ruled that carting Challan in this case is only for internal control of forest department. Such carting Challan is not equivalent to a consignment note which is issued by the transporter. The consignment note is a negotiable instrument and the transporter is bound to deliver the goods to a bonafide holder of title, as mentioned in the consignment note. Such elements of ‘consignment note’ are absent in the ‘carting Challan’.
The CESTAT held that carting Challan is not equivalent to consignment note. Accordingly, the appellant has not rendered the services as per the definition of GTA under the Finance Act.
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