Auto Cars Vs Commissioner of Central Excise and Service Tax (CESTAT Mumbai)
The CESTAT, Mumbai in M/s. Auto Cars v. Commissioner of Central Excise and Service Tax, Aurangabad [Service Tax Appeal No. 87630 of 2016 and 85895 of 2017 dated September 16, 2022] set aside the recovery demand orders against the assessee. Held that, the activity carried on by the assessee for providing the services of ‘Goods Transport Agency’ (“GTA”) does not fall within the category of ‘Clearing and Forwarding Agent’, provided to several recipients who were liable to discharge tax dues on freight under ‘Reverse Charge Mechanism (“RCM”)’ after availing permissible abatement.
Facts:
M/s Auto Cars (“the Appellant”) had been providing GTA services to several recipients, who, as corporate entities, were liable to discharge tax dues on the freight under RCM after availing permissible abatement.
The Appellant, from April, 2007, had expanded the scope of their business activities with offer of storage and warehousing, as well as ancillary facilitation under separate agreements with some of the customers in return for fixed monthly remuneration on which tax liability under the Finance Act, 1994 (“the Finance Act”) was being duly discharged and thereafter secondary transportation was also undertaken for delivery of goods at destinations as pre-determined by their customers for which the tax liability has already been discharged.
This appeal has been filed by the Appellant against the Orders for recovery of tax dues, dated March 28, 2016 and December 20, 2016 (“the Impugned Orders”) for alleged late payment of tax, to the extent of INR 1,34,37,061/- by penalty imposed under Section 76 of the Finance Act, recovery of undischarged tax liability of INR 31,83,62,007/- as provider of ‘clearing and forwarding agent’ service taxable under Section 65(105)(j) of the Finance Act for the period from April 2009 to January, 2014 along with interest thereon and recovery of INR 2,89,99,396 as tax dues for period ending in March, 2015 respectively.
The Appellant contended that, there are no provision in law, which mandates the merger of two separate, and distinct, services within a third taxable service merely for overcoming a statutory segregation and with intent to extract levy that is not authorised by law and expansion of scope of business does not alter the nature, and flexibility. Therefore, the Impugned Orders passed are disobeying the law.
Issue:
Whether the Impugned Orders for recovery of tax dues from the Appellant is liable to be set aside?
Held:
The CESTAT, Mumbai in Service Tax Appeal No. 87630 of 2016 and 85895 of 2017 held as under:
