Central Warehousing Corporation Vs CGST & Central Excise (CESTAT Ahmedabad)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad, allowed the appeals filed by the Central Warehousing Corporation (CWC) and set aside the service tax demands raised under the reverse charge mechanism (RCM) on alleged Goods Transport Agency (GTA) services. The Tribunal held that the composite Handling and Transportation (H&T) contracts could not be artificially split into cargo handling and transportation services for levying service tax under the GTA category.
The dispute arose from two show cause notices issued to the appellant demanding service tax of Rs. 47,71,487/- and Rs. 3,47,001/- respectively, along with interest and penalties. During departmental audits of two H&T contractors, it was found that the contractors had bifurcated their invoices into cargo handling charges, on which they paid service tax, and transportation charges, on which they indicated that service tax would be payable by the appellant under the reverse charge mechanism as GTA service. Based on this, the Department demanded service tax from the appellant. The adjudicating authority confirmed the demands with interest and penalties, and the Commissioner (Appeals) upheld those orders.
Before the Tribunal, the appellant contended that it had entered into composite H&T contracts covering transportation, cargo handling and several incidental activities. It argued that the contractors had wrongly bifurcated the consideration into cargo handling and GTA components to shift tax liability to the appellant. The appellant further submitted that it had classified its output services as Cargo Handling Services and discharged service tax on the entire value without claiming any abatement. It also argued that no consignment notes had been issued, which was an essential requirement for classification as a Goods Transport Agency service under the Finance Act, 1994.
