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Sivaskthi Engineering & Fabricators vs. The Commissioner of CentralExcise, Customs and ServiceTax - (Customs, Excise and Service Tax Appellate Tribunal) (20 May 2024)

Vehicles hired through a contract for transportation of the goods does not make Appellant liable to service tax

MANU/CB/0115/2024

Service Tax

The appellants are manufacturers and suppliers of Pre-Stressed Concrete Poles (PSC Poles) for the Kerala State Electricity Board (KSEB). The transportation of the PSC Poles was made on the basis of purchase orders placed by KSEB. The Appellant arranges the transport of these poles to various destinations as directed by their consignee KSEB. The Appellants were availing the facility of vehicles from another person and ensured that the goods were transported to the respective destinations, thus acting as an agent of the consignee (KSEB).

The Commissioner (Appeals) referring to Section 65(50b), definition of 'Goods Transport Agency' held that the above service provided in relation to transportation of goods is a taxable service and they are liable to pay the Service Tax. Accordingly, upheld the demand of Service Tax with reduction of penalties.

The period of dispute in the present case is 1st January, 2005 to 30th June, 2007 and during this period, the amended version of GTA is applicable. It is an undisputed fact that the appellant was hiring vehicles from a third party so as to arrange the transportation of the PSC Poles to various destinations of the consignee. The waybills were generated by the appellant and raised fortnightly statements for getting payment from KSEB and no consignment note as such was issued. As and when the PSC Poles had to be transported, trucks were hired from various truck owners for transporting the poles and the freight charges were collected from their consignee i.e., KSEB.

In the present case, admittedly vehicles were being hired by the appellant through a contract for transportation of the goods does not make them a Goods Transport Agency. Admittedly, no consignment notes were generated but fortnightly waybills were submitted by the appellant to their consignee for collecting the transport charges. Present Tribunal is of the view that they cannot be considered as 'Goods Transport Agency', therefore, not liable to service tax. The impugned order is set aside. Appeal allowed.

Tags : DEMAND   CONFIRMATION   LEGALITY  

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