Order date – 09 June 2022

Facts :

• The Respondent, M/s. Sarvaraya Sugars Limited, is receiving sugar cane harvest from farmers by using transport services. The payment to the transporters is made by the Respondent from the amounts adjusted against the price of sugarcane payable to the farmers.
• A Show Cause Notice was issued to the Respondent for the period from January 2005 to March 2010 for non-payment of service tax on the freight charges paid by them to the transporters under the GTA service head.
• The allegations were rejected by the adjudicating authority on the grounds that the Respondent cannot be treated as service recipient of the GTA services as the same was on account of the farmers and only payment was made by the Respondent as the price was fixed upto delivery to the Respondent’s factory. 
• Hence the department filed an appeal.

Issues:

Whether the Respondents can be termed recipient of GTA services?

Order:

• The Tribunal relied on the case of M/s Nandganj Sihori Sugar Co. Ltd. V. Commissioner of  Lucknow (Tri- Delhi), wherein it was held that when the transports did not issue consignment notes or GRs or Challans or any documents containing the particular as prescribed in Explanation to Rule 4B of the Service Tax Rules, 1994, the Transporters cannot be called ‘Goods Transport Agency” and, hence, in these cases, the service of transportation of sugarcane provided by the transporters would not be covered by Section 65(105)(zzp). 
• The Tribunal observed that Respondent have pleaded that there was no issuance of any consignment notes by the transporters and they cannot be stated to have received GTA services to attract Service Tax liability on RCM basis. However, the Ld. Adjudicating authority has decided the matter on the ground that the Respondent cannot be stated to be the recipient of transport services.  
• In view of the above discussions, the Tribunal did not find any reason to interfere with the impugned order and therefore the order is sustained.