Faiveley Transport Rail Technologies Ltd. Vs Commissioner of GST and Central Excise (CESTAT Chennai)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai heard an appeal against the Order-in-Appeal dated 31.01.2017 which had upheld the Order-in-Original confirming service tax demand of Rs.10,72,494 along with interest under Section 75 and equal penalty under Section 78 of the Finance Act, 1994.
The appellant, engaged in manufacture of compressors, air dryers and valves, incurred transportation expenses during 2010-11 towards GTA freight, courier services and small consignments. A show cause notice alleged non-payment of service tax under reverse charge on transportation charges and improper classification of certain services as courier services without adequate evidence. The adjudicating authority confirmed the demand, rejecting claims relating to courier classification, exemption for small consignments and tax already discharged by service providers. The Commissioner (Appeals) upheld the order on the ground that the appellant failed to substantiate its claims.
Before the Tribunal, the appellant argued that amounts paid to courier agencies could not be classified as GTA services in the absence of consignment notes, which were mandatory under Section 65(50b) of the Finance Act, 1994. It was contended that courier services are distinct from GTA services and that courier agencies themselves had discharged service tax. The appellant further submitted that in respect of freight paid to entities such as South Eastern Railways, service tax had already been paid by service providers and any further demand would result in double taxation. The appellant also claimed exemption for consignments valued below Rs.750 under Notification No. 34/2004-ST and disputed invocation of extended limitation and penalties.
