Order date – 14 October 2022

 Facts –

• The Appellant, M/s Beterman Engineering Private limited is engaged in the manufacture of Pollution Control Equipment and other fabricated structure of iron and steel.
• A show cause notice has issued on 29.04.2011 on the ground that it had paid Rs.4,31,426/- as freight charges and had paid Service Tax on an amount of Rs.1,51,847/- only, and it was alleged that they had not paid the Service Tax on the balance transport charges amounting to Rs,2,79,579/- involving Service Tax amounting to Rs.34,556/-. 
• Aggrieve appellant has filed an appeal.

 Issue – 

• Whether the service tax is to be on freight charges born by the consigner?

Order – 

• The Tribunal on perusal of the invoices issued by the supplier of the goods found that it has been categorically mentioned by M/s. Jindal Steel & Power Limited that the freight charges are to be borne by the consignor. Therefore the amount of freight delivery charges calculated, does not sustain and accordingly set aside.
• Regarding the other suppliers it is submitted that the consignor has paid the freight charges and hence the liability to pay Service Tax was on the consignor. It is the case of the Appellant that the goods were transported to the Appellant’s factory, but no consignment note was issued to the Appellant and the Appellant did not pay any amount to the truck owners/truck drivers and only paid the amount against the bill raised by the supplier which was inclusive of delivery charges. The Appellant did not pay any freight charges separately.
• The Tribunal relied on the decision of the case of CCE & C, Guntur Vs. Kanaka Durga Agro Oil Products Pvt. Ltd. [2009 (15) S.T.R. 399 (Tri.-Bang.)] and [2009-TIOL-1122-TRI-BANGALRE] holding that there is no liability on the recipient of service in the case of transportation by the individual truck owners and/or individual truck operators and not by goods transport agency to pay Service Tax is squarely attracted.
• The impugned order is set aside and appeal is allowed.