Kalyani Transco Vs Commissioner of CGST & Central Excise (CESTAT Kolkata)
M/s Kalyani Transco challenged the service tax demand confirmed by the Commissioner of CGST and Central Excise, Rourkela. The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal considered whether the appellant, a proprietorship concern transporting goods by road, could be treated as a Goods Transport Agency (GTA) when it had not issued consignment notes. The dispute related to Financial Year 2016-17. Following an investigation conducted on 11 May 2020 and comparison of income-tax returns/Form 26AS with ST-3 returns, the Department noticed receipts of Rs.43,10,61,862.39 described as transportation receipts and Rs.3,74,550 described as sales of WP. The Department alleged that the appellant had not correctly reported the receipts for service tax purposes.
The show-cause notice invoked the extended limitation period. Revenue questioned the absence of complete invoices and consignment notes and referred to Section 65B(26) of the Finance Act, 1994, Rule 4B of the Service Tax Rules, 1994, and Notification No.30/2012-Service Tax. The demand was confirmed in adjudication, prompting the appeal. The appellant submitted that no consignment note had ever been issued and that the concern did not qualify as a GTA. It relied upon Chartered Logistics, Vaishnav Marbles, Tata Power Company, Manak Chand Agarwal, Calcutta Ahmedabad Roadlines and Ballavpur Paper Manufacturing in support of its position. The appellant separately contested extended limitation, pointing out that the notice dated 5 October 2021 related to FY 2016-17. It also referred to the filing of service tax returns for the relevant half-yearly periods. The Revenue supported the adjudication order.
The Tribunal noted that the adjudicating authority had recorded the production of delivery challans containing purchase-order particulars, vehicle numbers and weight details, and had also recorded that the services did not fall within the GTA category. The Tribunal treated the absence of consignment notes and the non-GTA character of the service as decisive. Applying Section 66D(p) of the Finance Act, 1994, the Bench held that transportation of goods by road, other than services of a goods transport agency or courier agency, fell within the negative list. Because the appellant was not a GTA, service tax could not be demanded from it for the transportation services in question.
Cases Discussed
- Chartered Logistics Vs C.C.E. Ahmedabad-II, 2023 (7) TMI 883 – CESTAT Ahmedabad — Cited by the appellant on the non-GTA treatment of road transportation without consignment notes.
- Vaishnav Marbles Private Ltd. v. Commissioner, 2024 (5) TMI 274 – CESTAT New Delhi — Cited by the appellant on the non-GTA treatment of road transportation without consignment notes.
- Tata Power Company Ltd. v. Commissioner, 2024 (10) TMI 1062 – CESTAT Kolkata — Cited by the appellant on the non-GTA treatment of road transportation without consignment notes.
- Manak Chand Agarwal Vs Commissioner of CGST, Ex. and Cus., Udaipur, 2024 (6) TMI 348 – CESTAT New Delhi — Cited by the appellant on the non-GTA treatment of road transportation without consignment notes.
- Calcutta Ahmedabad Roadlines Private Limited v. Commissioner, 2024 (10) TMI 221 – CESTAT Ahmedabad — Cited by the appellant on the non-GTA treatment of road transportation without consignment notes.
- Ballavpur Paper Manufacturing Ltd. v. Commissioner, 2021 (5) TMI 440 – CESTAT Kolkata — Cited by the appellant on the non-GTA treatment of road transportation without consignment notes.
FULL TEXT OF THE CESTAT KOLKATA ORDER
Per Ashok Jindal : The appellant is in appeal against the impugned order.
2. The facts of the case are that he appellant was engaged in providing transportation services by road to various entities. The appellant did not issue consignment notes, and hence did not pay any Service tax on such transportation services. The appellant has been duly filing Service tax returns and discharging its liability as applicable, from time to time and an investigation was conducted at the premises of the appellant on 11.05.2020 and based on information/data received from Income tax Department, it was found that there is a difference between the figures of sale of services reflected in Income Tax Returns/Form 26AS and ST-3 Value for the Financial Year 2016-17. The Revenue observed that the appellant has received Rs.43,10,61,862.39/- as “Transportation Receipts” and Rs. 3,74,550/- as “Sales of WP,” and has not properly accounted for the same in their Service Tax returns.
2.1 Therefore, a show-cause notice was issued to the appellant by invoking extended period of limitation on the ground that on the ground that though the appellant provided some work orders and agreements, but failed to provide vital documents such as copies of all invoices and consignment notes evidencing that they are rendering GTA Services in accordance with Section 65(50b) of the Finance Act, 1994 read with Section 65B(26) further read with Rule 4B of Service Tax Rules, 1994. It was further alleged that some of the service recipients are persons other than the entities described under Rule 2(1)(d)(i)(B) of Service Tax Rules 1994, hence, the Notification No. 30/2012-Service Tax dated 20.06.2012 which specifies that for GTA services, the service recipient is liable to pay 100% of the service tax when the recipient falls under specific categories, may not be applicable. Further, Section 66D of the Finance Act, 1994 provides for services excluded from the levy of Service tax under the Negative List regime effective from 01.07.2012. However, the SCN alleges that the appellant has not established that its services fall under Section 66D. Therefore, the appellant has suppressed of facts with wilful intent to evade payment of tax.
2.2 The matter was adjudicated and the demand of service tax was confirmed .
2.3 Aggrieved from the said order, the appellant is before us.
3. The ld.Counsel for the appellant submits that this issue is in relation to levy of service tax on transportation service providers where consignment note is not issued is no longer res-integra and has been settled in favour of the appellant. It is her submission that it is the facts on record that the consignment note has never been issued and the appellant is a proprietorship concern, is not Goods Transport Agency (GTA). Therefore, the appellant is not liable to pay service tax. To support her contention, she relies on the following case laws :
(i) Chartered Logistics Vs. C.C.E. Ahmedabad-II reported at 2023 (7) TMI 883 – CESTAT Ahmedabad
(ii) Vaishnav Marbles Private Ltd. v. Commissioner 2024 (5) TMI 274 – CESTAT NEW DELHI
(iii) Tata Power Company Ltd. v. Commissioner 2024 (10) TMI 1062 – CESTAT KOLKATA
(iv) Manak Chand Agarwal Vs. Commissioner of CGST, Ex. And Cus., Udaipur reported at 2024 (6) TMI 348 – CESTAT New Delhi
(v) Calcutta Ahmedabad Roadlines Private Limited v. Commissioner 2024 (10) TMI 221 – CESTAT AHMEDABAD
(vi) Ballavpur Paper Manufacturing Ltd. v. Commissioner 2021 (5) TMI 440 – CESTAT KOLKATA
She further submits that the extended period of limitation is not invokable in the facts of the case as the show-cause notice has been issued on 5th October, 2021 for the Financial Year 2016-17 by invoking extended period of limitation. Further, the appellants were filing their returns for the period April to September, 2016 on 13.10.2016 and October 2016 to March 2017 on January 31, 2019.
4. The ld.A.R. for the Revenue supported the impugned order.
5. Heard both the parties and considered the submissions.
6. In this case, we find that the appellant is a proprietorship concern and has not issued any consignment note. The same has been recorded by the ld.Adjudicating Authority in the impugned order, which is as under :
“…….. When asked about the consignment note, he produced various delivery challan in some of the challan Purchase order was mentioned along with the vehicle numbers, challan number weight details. He further added that from the details of the Purchase order the rate of transportation can be ascertained. In some of the delivery challan, P.O details were not mentioned wherein he asked for some time to give the details since the period involved is 2016-17.”
The ld.Adjudicating Authority further observed that the appellants have been awarded with the work of transporting by the various parties to various destinations during the period 2016-17 and the appellant has submitted invoices raised against the consideration received from various service recipients. He further recorded that the services provided by the appellant to various entities as mentioned herein above, do not classify under the category of “Goods Transport Agency” as per Clause (26) of Section 65B of the Finance Act, 1944 w.e.f. 01.07.2012 read with Rule 4B of the Service Tax Rule, 1994. Admittedly, the ld.Adjudicating Authority found that the appellant is not the GTA. In that circumstances, the appellant is not liable to pay service tax under Section 66D (p) of the Act., which exempts services by way of transportation of goods by road except the services of goods transportation agency or courier agency. Admittedly, it has been held that the appellant is not the Goods Transport Agency, therefore, the said service falls under negative list as per Section 66D (p) of the Finance Act, 1994.
7. In that circumstances, we hold that the appellant is not liable to pay service tax. In such circumstances, the service recipient is liable to pay service tax under reverse charge mechanism, but as the service recipients are not before us, therefore, we do not pass any comments against service recipient whether they have paid the service tax or not ?
8. In that circumstances, we find that the demand of service tax against the appellant on transportation of goods by road, who has not issued consignment note and being not GTA, is not liable to pay service tax, therefore, whole of the demand of service tax is set aside. Consequently, no penalty is imposable on the appellant.
9. In view of this, we set aside the impugned order and allow the appeal with consequential relief, if any.
(Operative part of the order was pronounced in the open court)
