Pioneer Filing Station Vs Commissioner of CGST & Central Excise(CESTAT Kolkata)
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal allowed the appeal of Pioneer Filing Station against the confirmation of service tax of Rs.7,27,781, interest and an equal penalty under section 78 of the Finance Act, 1994. The dispute concerned the transport of LPG cylinders and petroleum products for Indian Oil Corporation Ltd. (IOCL) during financial year 2014-15. The appellant, a partnership firm, used its own trucks under IOCL transport work orders. Freight was calculated by reference to cylinders, kilolitres and distance. IOCL prepared bills and certified that it had discharged service tax under the reverse charge mechanism. A show cause notice based on income-tax return data had initially proposed a demand of Rs.9,08,226 on total receipts of Rs.73,48,109.
The original adjudicating authority dropped the entire demand. On departmental review, the dispute was confined to Rs.7,27,781 attributable to receipts of Rs.58,88,196, which the Revenue considered to be from other sources because they were not reflected in Form 26AS. The Commissioner (Appeals) nevertheless recorded that the full amount came from IOCL and that IOCL paid service tax under reverse charge. Despite this factual finding, the Commissioner (Appeals) classified the arrangement as vehicle rental, reasoning that the trucks were exclusively deployed for IOCL. The appellant argued that this introduced a new ground beyond the show cause notice and the departmental appeal, and that exclusive deployment did not alter the character of the transport contracts.
The appellant also argued that the service recipient was a body corporate liable under Notification No.30/2012-ST, that the tax had already been paid by IOCL, and that the mismatch between income-tax return receipts and Form 26AS could not itself establish a taxable liability. It additionally challenged invocation of the extended period of limitation. The Tribunal found it undisputed that the appellant supplied transport services to IOCL and that IOCL had paid service tax under the reverse charge mechanism. Referring to earlier Tribunal decisions in Adani Logistics and Sitaram Jaggnath Prasad Sihotia, it held that the appellant was not required to pay the same tax.
The Tribunal also recorded that the appellant had not issued consignment notes. On that basis, and because the recipient had already discharged service tax, it concluded that the appellant was not liable. The Bench did not separately adjudicate every alternative ground advanced by the appellant. Accordingly, the Tribunal set aside the service tax demand and held that no penalty could be imposed. The appeal was allowed with consequential relief, if any. The decision turns on the established facts of transportation, non-issuance of consignment notes and discharge of tax by the service recipient.
Cases Discussed
- Commissioner of Central Excise, Nagpur v. Ballarpur Industries Ltd., 2007 (215) E.L.T. 489 (S.C.) — Cited by the appellant for the rule that adjudication cannot travel beyond the show cause notice.
- Commissioner of Customs, Mumbai v. Toyo Engineering India Ltd., 2006 (201) E.L.T. 513 (S.C.) — Cited by the appellant on the limits of the show cause notice.
- Principal Commissioner of Central Excise, Goods & Service Tax, Gurugram v. Adani Logistics Ltd., 2026 (3) TMI 437 (CESTAT Chandigarh) — Cited by the appellant and relied upon by the Tribunal concerning service recipient liability under reverse charge.
- Sitaram Jaggnath Prasad Sihotia v. Commissioner (Appeals), Customs, Central Excise & CGST, Jaipur, 2024 (2) TMI 1252 (CESTAT New Delhi) — Relied upon by the Tribunal concerning transport without consignment notes and recipient-paid service tax.
- Angiplast Pvt. Ltd. v. Commissioner of Service Tax, Ahmedabad, 2013 (32) S.T.R. 628 (Tri.-Ahmd.) — Cited by the appellant against a second demand where service tax was already paid.
- Mandev Tubes v. Commissioner of Central Excise, Vapi, 2009 (16) S.T.R. 724 (Tri.-Ahmd.) — Cited by the appellant in its submissions on double taxation.
- Nanu Shome & Co. v. Commissioner of C.G.S.T. and Central Excise, Siliguri, 2026 (1) TMI 1015 (CESTAT Kolkata) — Cited by the appellant concerning demands based on income-tax/Form 26AS differences.
- S.K. Logitech Private Limited v. Commissioner of Central Goods and Service Tax, Dibrugarh, 2026 (8) TMI 332 (CESTAT Kolkata) — Cited by the appellant against invocation of extended limitation.
Alternative SEO Titles
IOCL Reverse Charge Payment Bars Second Service Tax Demand on Transporter
CESTAT Quashes Rs.7.27 Lakh Service Tax Demand on Pioneer Filing Station
No GTA Tax Liability Without Consignment Note: CESTAT Kolkata
Transport Contract Not Taxable Again After IOCL Pays Service Tax
CESTAT Allows Transporter Appeal Against Service Tax and Penalty
FULL TEXT OF THE CESTAT KOLKATA ORDER
The appellant is in appeal against the impugned order wherein the demand of service tax of Rs.7,27,781/- has been confirmed along with interest and an equivalent amount of penalty under Section 78 of the Finance Act, 1994, was also imposed on the appellant.
2. The facts of the case are that the Appellant is a partnership firm which, during FY 2014-15, transported LPG cylinders and petroleum products for M/s. Indian Oil Corporation Ltd. („IOCL‟) by road in its own trucks, under IOCL work orders dated 31.05.2013, 08.07.2013 and 10.11.2014. Freight was fixed per type of cylinder or per KL and per KL per km, and the bills were raised by IOCL itself, showing the vehicle number, quantity, acknowledged quantity and short amount. IOCL certified that it paid Service tax thereon under reverse charge. These documents are recorded in the impugned Order. 2.1 On the basis of CBDT data, Show Cause Notice dated 08.11.2019 was issued demanding Service tax of Rs. 9,08,226/- at 12.36% on the entire receipts of Rs. 73,48,109/- declared as „sale of services‟ in the ITR, by best judgment assessment and invoking the extended period, with interest and penalties under Sections 77 and 78 of the Finance Act, 1994, without specifying the taxable service. 2.2 The Order-in-Original bearing No.AC/GST & CX DIVN/B-II/72/2022 dated 16.08.2022 dropped the entire demand, holding that the Appellant transported LPG cylinders for IOCL in its own trucks and that, under Notification No.30/2012-ST dated 20.06.2012, the Service tax on transportation of goods by road is payable by the service recipient. 2.3 On review, the Department appealed only against Service tax of Rs.7,27,781/- on Rs.58,88,196/-. It accepted that Rs.14,59,913/-, reflected in Form 26AS as received from IOCL, was correctly held to be covered by the said Notification, and alleged that the balance was received from “other sources” as it was not reflected in Form 26AS. In reply, the Appellant filed the IOCL work orders, IOCL certificate, bills, ITR, Form 26AS, Profit & Loss Account and RC books. 2.4 Vide the impugned Order, the Commissioner (Appeals), Bhubaneswar found that the entire Rs.73,48,109/- was received from IOCL towards services and that IOCL paid the Service tax under reverse charge without the Appellant collecting any tax (Para 7.4). However, he allowed the Department‟s appeal holding that:
” since the Appellant was assigned deployment of specific trucks which could not be used for other works or diverted during the contract period, the Appellant provided “rental service” to IOCL and not transportation servic; and – Service tax of Rs.7,27,781/- is recoverable under Section 73(1) with interest, and penalty of Rs. 7,27,781/- is imposable under Section 78 of the Finance Act, 1994. 2.5 Being aggrieved by the impugned Order, the appellant is before us.
3. The ld.Counsel for the appellant submits that the impugned Order has confirmed the demand on a new ground of “rental service”, beyond the SCN and the Department‟s appeal. It is submitted that the Department‟s appeal only alleged that Rs. 58,88,196/- was received from sources other than IOCL. The Commissioner (Appeals) framed this as the sole issue and answered it in the appellant‟s favour- he then confirmed the demand as “rental service”, without identifying the provision taxing it. This charge was neither in the SCN nor in the Department‟s appeal, and was never put to the Appellant. The impugned Order has thus travelled beyond the SCN and is liable to be set aside on this ground alone. To support her contention, she relies on the following case laws :
(i) Commissioner of C. Ex., Nagpur v. Ballarpur Industries Ltd. 2007 (215) E.L.T. 489 (S.C.)
(ii) Commissioner of Customs, Mumbai v. Toyo Engineering India Ltd. 2006 (201) E.L.T. 513 (S.C.), 3.1 She further submits that the appellant provided transportation of goods by road to IOCL, and the Service tax thereon is payable, and has been paid, by IOCL under reverse charge. It is further submitted that the work orders are for “transportation” under a “Transport contract”, with freight per cylinder or per KL/km, and the IOCL bills record the quantity carried, acknowledged and short. The consideration is for carriage of goods, not hire of vehicles. Exclusive deployment of trucks for IOCL does not convert carriage into renting. – Under Paragraph I(A)(ii)(e) read with Sl. No.2 of the Table to Notification No.30/2012-ST dated 20.06.2012, where the person liable to pay freight for transportation of goods by road is a body corporate such as IOCL, the entire Service tax is payable by such person and nil by the service provider. The adjudicating authority rightly so held. She further submits that the Department itself accepted Rs.14,59,913/-, received under the same work orders, as covered by the Notification; treating the balance as rental is self-contradictory. As IOCL admittedly paid the tax under reverse charge, the demand amounts to double taxation. In this regard, she relies on the following case laws :
(i) Principal Commissioner of Central Excise, Goods & Service Tax, Gurugram v. M/s. Adani Logistics Ltd. 2026 (3) TMI 437 – CESTAT CHANDIGARH ;
(ii) Mr. Sitaram Jaggnath Prasad Sihotia v. Commissioner (Appeals), Customs, Central Excise & CGST, Jaipur 2024 (2) TMI 1252
– CESTAT NEW DELHI ;
(iii) Angiplast Pvt. Ltd. v. Commissioner of Service Tax, Ahmedabad 2013 (32) S.T.R. 628 (Tri.-Ahmd.) ;
(iv) Mandev Tubes v. Commissioner of Central Excise, Vapi 2009 (16) S.T.R. 724 (Tri.-Ahmd.). The CBEC has also clarified vide Letter F. No.341/18/2004-TRU (Pt.) dated 17.12.2004 that Service tax on transportation paid by one person should not be charged from any other person, to avoid double taxation, as followed in Angiplast (supra).
3.2 It is further submitted that the demand based on the difference between the ITR and Form 26AS is not sustainable. – It is submitted that the SCN rests only on the ITR figure, and the Department‟s appeal on the lower TDS in Form 26AS, which is within IOCL‟s control. The Appellant declared the entire Rs.73,48,109/- in its ITR and P&L as “Gross Transportation Charges Received” (Para 7.5), and the Commissioner (Appeals) found invoice-wise receipt of the same from IOCL (Para 7.4). The Department‟s appeal was also mechanical, assailing an unrelated Order-in-Original No. ADC/BBSR/ST-122-123/2022 dated 06.07.2022. To support her contention, she relies on the decision of this Tribunal in the case of M/s. Nanu Shome & Co. v. Commissioner of C.G.S.T. and Central Excise, Siliguri 2026 (1) TMI 1015 – CESTAT KOLKATA. 3.3 She further submits that the extended period of limitation is not invocable. She submits that the SCN for FY 2014-15 was issued on 08.11.2019, beyond the normal period, solely on ITR data available with the Department. The Appellant disclosed its entire receipts, and its bona fide belief that IOCL was liable under reverse charge was upheld by the adjudicating authority; IOCL in fact paid the tax. There was no suppression with intent to evade, and the demand is time-barred. In support, she relies on the following decisions :
(i) M/s. S.K. Logitech Private Limited v. Commissioner of Central Goods and Service Tax, Dibrugarh 2026 (8) TMI 332 – CESTAT KOLKATA ;
(ii) Ballarpur Industries Ltd. (supra). She therefore, prays that the impugned order be set aside and the appeal be allowed with consequential benefits.
4. The ld.A.R. for the Revenue has justified the impugned order.
5. Heard both the parties and considered the submissions.
6. We find that the facts are not in dispute that the appellant is providing transport services to M/s Indian Oil Corporation Ltd. who is paying service tax under reverse charge mechanism. Admittedly, under “Goods Transport Agency”, if the service recipient is paying service tax under reverse charge mechanism, the appellant is not required to pay service tax.
7. On similar view has been taken by this Tribunal in the cases of Principal Commissioner of Central Excise, Goods & Service Tax, Gurugram Vs. M/s Adani Logistics Ltd. reported in 2026 (3) TMI 437 – CESTAT Chandigarh and Mr.Sitaram Jaggnath Prasad Sihotia Vs. Commissioner (Appeals),Customs, Central Excise & CGST, Jaipur reported in 2024 (2) TMI 1252 –CESTAT New Delhi.
8. In the case of Mr.Sitaram Jaggnath Prasad Sihotia (supra), this Tribunal has observed as under :
“10. From the facts of the present case, I find that the appellant apart from running the petrol pump outlet is also providing the transportation of petroleum pump on behalf of M/s BPCL, the service receiver and M/s BPCL has issued a certificate mentioning that service tax has been discharged by them on monthly basis being the person liable to pay tax on services received under Goods Transport Agency as per the provisions of the Finance Act. Therefore, the service tax liability has been discharged by the service receiver and consequently the appellant is not liable to discharge the same once again.
11. In terms of the negative list, the appellant being the owner of the truck and providing the transportation through it cannot be treated as GTA service and would, therefore, squarely fall under the exemption, which reads as under: “Section 66D. Negative list of services – The negative list shall comprise of the following services, namely:- (p) services by way of transportation of goods-
(i) by road except the services of –
(A) a goods transportation agency; or
(B) a courier agency.”
12. In the present case, I find that it is an undisputed position that the appellant had not issued any consignment notes by whatever name and hence in view of the law laid down by the series of decisions, no service tax liability can be imposed.
13. I, therefore, hold that the demand proposed in the show cause notice for recovery of service tax of Rs. 1,69,003/- along with interest and penalty is liable to be dropped and the impugned order needs to be set aside. The appeal is accordingly, allowed.”
9. Admittedly, the appellant has not issued any consignment note and the service tax has been paid by the service recipient under reverse charge mechanism, in that circumstances, the appellant is not liable to pay service tax.
10. Therefore, we hold that the demand of service tax is not sustainable. Consequently, no penalty is imposable on the appellant.
11. 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)
