Scope of Exemption to G T A Service-Rs.750/- Per consignee and Rs.1500/-per consignment Explained

(mad)-cce vs. Suibramania Siva co op sugar Mills Ltd. (2014)52 taxmann.com 339

 

FACTS:

The assessee availed the services of goods transport agency in respect of transport of sugarcane into the factory and paid service tax on freight Inward that exceeded Rs 1500/- but did not pay service tax on the amount of freight that exceeded Rs 750/- but was below Rs.1500/- The department contended that as per Notification No.34/2004-ST dated 03/12/2004, a limit of Rs.1500/- in the said notification applies only in respect of multiple consignments whereas in case of individual consignment, the said limit is only Rs.750/- Tribunal decided in favor of the assessee.

HELD:

Explaining the scope of exemption, the High Court held that as is evident from the reading of the explanation, individual consignment covered in sub-clause (2) of the said exemption means all goods transported by goods transport agency for “a  consignee “ In contradistinction to this, fixing of exemption limit of Rs.1500/- under sub clause (1) is not limited to the consignment to the individual consignee but it refers to consignments relatable to more than one consignee. Thus by making two classifications, the exemption notification limits its operation based on the consignee, the charges and the consignment. Therefore, where the goods carried are for the single consignee  i.e. assessee alone, the assessee case would fall under sub-clause (2) in which event, when the gross amount charged exceeded Rs.750/- the tax liability will arise. It was also held that the decision of the Tribunal rendered in favor of the assessee on the  ground that individual truck operator did  not fall within the definition of “goods transport agency” relying upon the decision in the case of kanaka Durga Agro Oil Products (2009) 22 STT 435(Bang-Tribunal) was relied upon cannot be upheld