Adarsh Marketing Vs Commissioner (CESTAT Delhi)
CESTAT Delhi allowed three appeals filed by M/s Adarsh Marketing and M/s Chhabra Enterprises against service tax demands concerning Goods Transport Agency (GTA) services provided under agreements with their principals. The appellants acted as clearing and forwarding (C&F) agents and, under the same agreements, provided both C&F Agent services and GTA services. They paid service tax on amounts received for C&F services but not on amounts received for GTA services.
Revenue contended that transportation of goods was integral to C&F Agent services and that the entire consideration should therefore be subjected to service tax as C&F Agent service. The appellants submitted that the agreements separately provided for the two services and their respective amounts, with transportation amounts being reimbursements of expenses. They further submitted that, since their principals were bodies corporate, any service tax liability on GTA services rested with the recipients under the reverse charge mechanism.
The Commissioner (Appeals) had upheld the demands. Before CESTAT, the appellants relied on an earlier Tribunal decision concerning M/s Aastha Solutions, where the Tribunal had held that a common agreement did not make separately remunerated C&F and GTA services a single bundled service. CESTAT also noted decisions holding that amounts collected for GTA services could not be included in C&F Agency service consideration merely because both services were provided under the same agreement. It found that the impugned order could not be sustained, set it aside, and allowed all three appeals, with consequential reliefs, if any.
