[2014] 52 Taxmann.com 339 (Mad) – CCE vs. Suibramania Siva Co-op Sugar Mills Ltd.

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.1,500/-, but did not pay service tax on the
amount of freight that exceeded Rs. 750/-, but was below Rs.1,500/-. The
department contended that as per Notification No.34/2004-ST dated
03/12/2004, a limit of Rs.1,500/- 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.1,500/- under subclause (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’s 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.