KMB GRANITES (P) LTD. Vs. CCE

JUDGEMENT

(1.) THIS is an application filed by M/s. KMB Granites (P) Ltd. seeking waiver of predeposit of service tax of an amount of Rs. 44,663/ - found to be due on 'Goods Transport Agency Service' ('GTA service' for short) availed by them during the period 1/2005 to 6/2005.

(2.) HEARD both sides. The consistent case of the appellants has been that the impugned demand was raised on them under the head 'GTA service' for freight incurred for transport of their materials by trucks and that the truck operators in their case were not covered by the definition of 'goods transport agency'. As per Sub -section (50)(b) of Section 65 of the Finance Act, 1994 (the Act), 'goods transport agency' means 'any commercial concern which provides service in relation to transport of goods by road and issues consignment note, by whatever name called'. According to the appellants the truck operators who transported their goods in all cases did not own a fleet of trucks or operated as an established agency of transporters. They could not be held to fall under 'commercial concern' which alone could attract levy under GTA. Only when the definition of GTA was amended on 1.5.2006 by substituting 'commercial concern' with 'any person' the impugned services became exigible to service tax. The appellant relies on a decision of this Tribunal in the case of Mangal Singh v. Commissioner of Central Excise, Jaipur - I reported in wherein a penalty imposed for failing to file service tax returns on the appellant classified as a provider of service under the head 'manpower recruitment or supply agency services' was vacated on the ground that the definition of the said service during the material period did not cover such services rendered by an individual. During the material period such services rendered by a commercial concern was subjected to tax. With effect from 16.6.2005 the definition of that service was amended by substituting 'commercial concern with 'any person'.

(3.) I find that the appellants have made prima facie case against the impugned demand of service tax. It is accordingly ordered that there shall be waiver of predeposit and stay of recovery of the impugned demand of service tax pending decision in the appeal.