ESSAR LOGISTICS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS appeal is directed against Order -in -Original No. 10/MP/2010, dated 27 -10 -2010. The relevant facts that arise for consideration are the appellant herein was engaged by M/s. Essar Oil Ltd. (hereinafter referred to as EOL) for transportation of their final products from refinery to depots of EOL itself, as well as to various terminals hired by the EOL. In the case of transfer of final products to depots of EOL, Service Tax leviable is being paid by EOL itself hence it was not in dispute. Whereas in the case of transportation of final products from refinery of EOL to their franchisees and other depots of the EOL as the goods transport agency, are charging freight from said consignee, on the basis of lorry receipts. After a detailed investigation and recording of various statement, show cause notice was issued to appellant directing them show cause as to why Service Tax liability under GTA services be not demanded from them, interest thereof and also why penalties be not imposed on them. The appellant herein defended their action of non -discharge of Service Tax liability in the reply filed to the show cause notice, on the ground that the appellant herein is a GTA service provider and as per the provisions of Service Tax Rules, Service Tax liability on the services received from GTA services would be on the consignor or consignee, as the case may be and the issue is barred by limitation. The adjudicating authority after following the due process of law, confirmed the demands raised in the show cause notice, also demanded the interest on the said amount and imposed penalties under various sections of the Finance Act, 1994.

(2.) LD . counsel appearing on behalf of the appellant would submit that it is undisputed that the appellant is providing GTA services. It is his submission that the department has mis -interpreted the provision of Rules 2(1)(d)(v), inasmuch the liability to pay Service Tax falls upon the person who is liable to discharge freight, it may either the consignor or the consignee, and falls under any of the seven categories listed under said rule. He would then take us thorough the said rule. After going through the said rule, he would submit that the appellant herein has no obligation to ensure that the consignee in each case was an entity covered by one of such heads under the said rule, since the consignor in each case was M/s. EOL, company registered under the Companies Act, 1956, accordingly liability to pay Service Tax ipso facto falls on the person liable to pay freight. It is his submission that in the case in hand liability to pay freight is on consignee/consignor and hence they cannot be forced to pay the Service Tax. He would submit that the Hon'ble Tribunal in the case of MSPL Ltd. v. CCE [ : 2009 (13) S.T.R. 554 (Tri. -Bang.)] and Sicgil India Ltd. v. CCE, Cus. & S.T. [ : 2010 (19) S.T.R. 747 (Tribunal)] has clearly held that the liability to pay Service Tax is cast upon the person who pays the freight. It is his submission that the issue involved in this case is appellant is one of the interpretation and hence the show cause notice cannot invoke extended period is as done by the department.

(3.) WE have considered the submissions made at length by both sides and perused the records.