Mspl Ltd. Vs. Commissioner of Central Excis - Court Judgment

SooperKanoon Citationsooperkanoon.com/928678
SubjectService Tax
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT
Decided OnMay-19-2009
JudgeT.K. Jayaraman (T) and M.V. Ravindran (J), Members
Reported in[2009]23STT107
AppellantMspl Ltd.
RespondentCommissioner of Central Excise
Excerpt:
ordert.k. jayaraman, member (t)1. as the issue lies in a narrow compass, we dispose of both the stay application and appeal together. we heard both the sides.2. the appellants are manufacturers of gases. they used their own vehicle for transporting the gas cylinders to the premises of the buyers on collection of freight charges. revenue proceeded against the appellants on the ground that they would be liable to service tax under the category of gta. it was pointed out that the very same issue has been the subject-matter of the final order of this bench in the appellant's own case, mspl ltd. v. cce [2009] 20 stt 384 (bang. - cestat), wherein it is held that as follows:6.1 from the above, it is very clear that the legislative intent is to tax only the services, provided by a goods transport agent to a customer and not the owner. further, the learned advocate referred to our attention rule 2(l)(d)(v) of the service tax rules, 1994 wherein the person liable to pay service tax is defined. person liable to pay service tax means the person who pays or is liable to pay the freight. rule 2(1)(d)(v) 's reproduced herein below:(v) in relation to taxable service provided by a goods transport agency, where the consignor or consignee of goods is,--(a) any factory registered under or governed by the factories act, 1948 (63 of 1948);(b) any company formed or registered under the companies act, 1956 (1 of 1956);(c) any corporation established, by or under any law;(d) any society registered under the societies registration act, 1860 (21 of 1860) or under any law corresponding to that act in force in any part of india;(e) any co-operative society established by or under any law;(f) any 'dealer of excisable goods', who is registered, under the central excise act, 1944 (1 of 1944) or the rules made thereunder; or(g) any body corporate established, or a partnership firm registered, by or under any law,any person who pays or is liable to pay freight either himself or through his agent for the transportation of such goods by road in a goods carriage;9. on a very careful consideration of the entire issue, we find that the appellants transport the goods in their own vehicle to the buyer. the buyer is a person who actually pays the freight. it is very clear in terms of rule 2(1)(d)( v) that the liability to pay service tax is cast on the person who pays the freight. in this case the person who pays the freight is the buyer. therefore, the appellant has no liability to pay the service tax. in such circumstances, the action of the commissioner (appeals) in setting aside the original order is correct, but there is absolutely no need for remanding the matter. the appellant has no liability at all, to pay the service tax. hence, the appeal is allowed with consequential relief.3. following the ratio of the above decision, we allow the appeal with consequential relief. thus stay petition and appeal are disposed of in the above manner.
Judgment:

ORDER

T.K. Jayaraman, Member (T)

1. As the issue lies in a narrow compass, we dispose of both the stay application and appeal together. We heard both the sides.

2. The appellants are manufacturers of gases. They used their own vehicle for transporting the gas cylinders to the premises of the buyers on collection of freight charges. Revenue proceeded against the appellants on the ground that they would be liable to service tax under the category of GTA. It was pointed out that the very same issue has been the subject-matter of the final order of this Bench in the appellant's own case, MSPL Ltd. v. CCE [2009] 20 STT 384 (Bang. - CESTAT), wherein it is held that as follows:

6.1 From the above, it is very clear that the legislative intent is to tax only the services, provided by a Goods Transport Agent to a customer and not the owner. Further, the learned Advocate referred to our attention Rule 2(l)(d)(v) of the Service Tax Rules, 1994 wherein the person liable to pay service tax is defined. Person liable to pay service tax means the person who pays or is liable to pay the freight. Rule 2(1)(d)(v) 's reproduced herein below:

(v) in relation to taxable service provided by a goods transport agency, where the consignor or consignee of goods is,--

(a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948);

(b) any company formed or registered under the Companies Act, 1956 (1 of 1956);

(c) any corporation established, by or under any law;

(d) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India;

(e) any co-operative society established by or under any law;

(f) any 'dealer of excisable goods', who is registered, under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder; or

(g) any body corporate established, or a partnership firm registered, by or under any law,

any person who pays or is liable to pay freight either himself or through his agent for the transportation of such goods by road in a goods carriage;

9. On a very careful consideration of the entire issue, we find that the appellants transport the goods in their own vehicle to the buyer. The buyer is a person who actually pays the freight. It is very clear in terms of Rule 2(1)(d)( v) that the liability to pay service tax is cast on the person who pays the freight. In this case the person who pays the freight is the buyer. Therefore, the appellant has no liability to pay the service tax. In such circumstances, the action of the Commissioner (Appeals) in setting aside the original order is correct, but there is absolutely no need for remanding the matter. The appellant has no liability at all, to pay the service tax. Hence, the appeal is allowed with consequential relief.

3. Following the ratio of the above decision, we allow the appeal with consequential relief. Thus stay petition and appeal are disposed of in the above manner.