Case Law Details
Chebrolu Agros Pvt Ltd. Vs Commissioner of Central Excise And Service Tax (CESTAT Hyderabad)
The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal examined the levy of Service Tax on threshing of tobacco leaves and on freight charges paid to truck operators for the period from April 2010 to March 2011. The Department had raised demands under the categories of Business Auxiliary Service (BAS) and Goods Transport Agency (GTA) service. During the hearing, no one appeared on behalf of the appellant. The departmental representative submitted that the issue relating to BAS was no longer res integra in view of an earlier Tribunal decision and stated that the Department was not contesting the BAS demand. With regard to GTA service, reliance was placed on an earlier order in the appellant’s own case where the demand had been confirmed.
The Tribunal identified the principal question as whether Service Tax was leviable on threshing charges under BAS. It observed that this issue had already been settled and that, even in the appellant’s own earlier case, the demand under BAS had been set aside. Accordingly, the Tribunal held that Service Tax could not be levied on threshing charges under BAS.
On the GTA issue, the Tribunal noted that although the earlier order had upheld the demand, there was no detailed reasoning in that decision, apart from reliance on another Tribunal judgment rendered on a specific factual matrix. The Tribunal further observed that, in the present appeal, the appellant had cited several Tribunal decisions to contend that services availed from private truck operators could not be subjected to Service Tax under GTA in the absence of a consignment note. It found from the impugned order that these case laws had been cited but were not discussed in detail.
The Tribunal reiterated the settled legal position that unless a consignment note or a similar document having the characteristics prescribed under the statute is issued, the service cannot be classified as GTA service. It noted that this principle had been consistently affirmed by various coordinate benches. On examining the record, the Tribunal found no evidence showing issuance of consignment notes or similar documents in the present case. In the absence of such evidence, it held that the demand under the GTA category could not be sustained.
In view of these findings, the Tribunal concluded that the Service Tax demands raised under both BAS and GTA categories were unsustainable. Consequently, the impugned order was set aside in full and the appeal was allowed.
FULL TEXT OF THE CESTAT HYDERABAD ORDER
Nobody appeared on behalf of the appellant. Learned AR points out that the issue involved is levy of Service Tax on Threshing charges and a small amount on freight amount paid to truck operators. The demand period is April 2010 to March 2011.
2. The brief fact of the case is that the Department demanded Service Tax under the category of Business Auxiliary Service (BAS) as well as under Goods Transport Agency (GTA) service on the activity undertaken by the appellant i.e. Threshing of tobacco leaves.
3. Learned AR submits that in so far as the issue of demand of Service Tax under the category of BAS is concerned, the matter is no longer res-integra in view of decision of the Tribunal in the case of M.L. Agro Products Ltd., Vs Commissioner [2017 (6) GSTL 94 (Tribunal). Therefore, they are not contesting the demand on BAS. Further, in so far as demand on GTA service is concerned, the Tribunal in their own case vide Commissioner of Customs, Central Excise & Service Tax, Guntur Vs Chebrolu Agros Pvt Ltd., [2018 (17) GSTL 282 (Tri-Hyd)], decided against them and confirmed the demand under GTA. Therefore, the demand on GTA service will stand.
4. Heard Learned AR and perused the appeal memorandum.
5. We find that short question for determination is whether the Service Tax is leviable under BAS in respect of threshing charges received by the appellant. We find that this issue is no longer res-integra. Infact, in their own case cited, supra, also the Tribunal set aside the demand under this category. In so far as the demand on GTA service is concerned, we find that vide in the order cited supra the Tribunal has upheld the demand, but, we do not find any detailed reason as to why it has been upheld except for the fact that they have relied on the judgment in the case of order Nos. A/30302-30350/2017 dated 22.02.2017 [2017 (6) GSTL 94 (Tri-)], wherein, the demand under the category of GTA was upheld, based on certain factual matrix of the case. We find that in the grounds of appeal, they have mentioned the Commissioner has not taken into consideration various case laws and decisions of the Tribunal cited by them in support that no Service Tax can be levied on the services availed from private truck operators. We find from the impugned Order-in-Original that the appellant had cited various case laws including Lakshminarayana Mining Co. Vs Commissioner of S.Tax, Bangalore [ 2009 (16) STR 691 (Tri-Bang)], in support that no service tax is leviable under GTA service in the facts of the case, as under:
i. Kankadurga Agro Oil products Pvt Ltd., Vs CCE, Guntur [2009 (15) STR 399 (Tri-Bang)
ii. M.B. Granites Pvt Ltd., Vs CCE, Salem [2010 (19) STR 437 (Tri-Chennai)]
iii. Bellary Iron and Ores Pvt Ltd., Vs CCE, Belguam [2010 (18) STR 406 (Tri-Bang)
iv. Salem Co-operative Sugar Mills Vs CCE, Salem [2010 (19) STR 435 (Tri-Chennai)]
v. Shanti Fortune India Pvt Ltd., Vs CCE, Coimbatore [2010 (19) STR 883 (Tri-Coimbatore)]
6. We find that no detailed discussion has taken place to disallow the demand under the GTA category. It is a settled position that unless the consignment note is issued or any other similar document is issued which has the resemblance of a consignment as provided by the Statute, the service cannot be brought under GTA service. This has been held in catena of judgments by the Co-ordinate Benches. We do not find any evidence to the contrary on record. Accordingly, we do not find any merit to uphold the demand under the category of GTA service. In essence, demand under both the categories cannot be sustained and impugned order is set aside.
7. Appeal allowed.
(Order Pronounced in open court on 22.01.2026 )
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