Order Date – 19 July 2023

Parties: Chartered Logistics Limited Vs C.C.E - Ahmedabad-II

Facts – 

• The Appellant, Chartered Logistics Limited, was found to be provided taxable services in relation to “managing distribution and logistics” and “operational or administrative assistance” in business to M/s Reliance Supply Chain Solution Ltd. (M/s RSCPL) & M/s Fine Tech Corporation Pvt. Ltd. (M/s FCPL) from their various Branch Offices situated all over India.
• Appellant had reportedly charged service charges on fixed lump sum basis per month per vehicle and variable cost at agreed rate for their own vehicles which appeared to be the consideration received against “supply of tangible goods for use” service which was taxable. Appellant had not issued any consignment note/LR in regards to such services for transportation of any of the consignments. Appellant was not paying service tax on the aforesaid service activity.
• Accordingly, show cause notice dated 31-08-2020 was issued to the appellant proposing the Service tax demand along with interest and penalty. The Learned Commissioner confirmed the demand and imposed penalty.

Issue – 

• Whether exemption is available on the services provided by the applicant under the “Market led Fee-based Services Scheme”?

Order – 

• The Tribunal observed that in the present matter it is admitted fact that in case of supply of transportation of goods services to M/s FCPL. Appellant have not issued any consignment notes. M/s FCPL issued consignment notes/LRs to consignee/consignor of goods. In such circumstance Appellant is not qualified under the Goods Transport Agency as per the above definition of GTA.
• Thus, the services of appellant is clearly excluded from the taxable services since it is covered in the “Negative List” Entry under Section 66D (p)(i) of the Finance Act, 1994.
• It is a settled law that even if a person has provided Goods Transport Service but not issued consignment note/LR, Service Tax from that person under GTA cannot be recovered. The case of the appellant is on much better footing on the admitted fact that the appellant’s client FCPL is in fact the GTA who issued „Consignment Note‟ in respect of the Transportation Service provided to M/s Reliance Industries Ltd. Therefore, appellant is not liable to pay Service Tax.
• In the present matter FCPL has issued consignment notes/ LRs for transportation of goods, hence M/s FCPL is clearly covered under the definition of Goods Transport Agency Service and if at all there is any Service Tax liability it is on the service recipient of FCPL i.e. M/s Reliance Industries Ltd.
• In the present case the appellant have acted legitimately by entering into legal contract with their service recipient M/s FCPL. All the transaction were recorded in their books of account and all documents such as invoices for their services were issued. Moreover, the issue involved in the present case is strict interpretation of the taxable service. Therefore, extended period of limitation could not have been invoked. Therefore, the demand for the extended period is not sustainable on limitation also.
• Hence the appeal is allowed.
  
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