Activity cannot be taxed as GTA services without issuance of consignment note: CESTAT

The appellant, M/s Green Leaf Tobacco Threshers Ltd, challenged an Order-in-Original dated January 11, 2013, passed by the Commissioner of Customs, Central Excise & Service Tax (CESTAT), Guntur.  The Revenue had raised a service tax demand against the appellant under the category of “Goods Transport Agency” (GTA) services. The department alleged that the appellant was liable to pay service tax on the transport of goods by road. However, the appellant contended that the essential legal requirement for a service to be classified as GTA the issuance of a “consignment note” was not met in their case.

Central Issue: Whether the transport activities performed by or for the appellant could be classified as “Goods Transport Agency” services under Section 65(50b) of the Finance Act, 1994, even in the absence of a consignment note.

Tribunal Held: The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), allowed the appeal and set aside the demand. The Tribunal noted that Section 65(50b) specifically defines a GTA as any person who provides services in relation to the transport of goods by road and issues a consignment note.

Upon reviewing the record, the Bench found no evidence that any document resembling a consignment note, as prescribed under Rule 4B of the Service Tax Rules, had been issued. Following a consistent line of judicial precedents, the Tribunal held that without the issuance of a consignment note, the activity cannot be brought under the ambit of GTA services.

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