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Leo Packers & Movers V/S Commr. of C. Ex., Cus. & S.T., Hyderabad-II


Company & Directors' Information:- A S J MOVERS PRIVATE LIMITED [Active] CIN = U74899DL1989PTC034770

Company & Directors' Information:- MOVERS (INDIA) PRIVATE LIMITED [Active] CIN = U29244KA1979PTC003510

Company & Directors' Information:- L C PACKERS PRIVATE LIMITED [Active] CIN = U25202DL2012PTC241798

Company & Directors' Information:- LEO PACKERS AND MOVERS INDIA PRIVATE LIMITED [Active] CIN = U63090TG2007PTC052910

Company & Directors' Information:- S R MOVERS PVT LTD [Active] CIN = U63031WB1988PTC044863

Company & Directors' Information:- K M D PACKERS PRIVATE LIMITED [Active] CIN = U74950DL2000PTC104742

Company & Directors' Information:- A G MOVERS PRIVATE LIMITED [Strike Off] CIN = U15542CH1999PTC022472

Company & Directors' Information:- PACKERS INDIA PVT LTD [Active] CIN = U99999MH1985PTC038391

Company & Directors' Information:- Q E D PACKERS PRIVATE LIMITED [Active] CIN = U74950DL2001PTC110725

Company & Directors' Information:- S S A S PACKERS PRIVATE LIMITED [Active] CIN = U21029WB2012PTC179508

Company & Directors' Information:- C T A MOVERS PVT LTD [Active] CIN = U51103WB1989PTC047754

Company & Directors' Information:- PACKERS AND MOVERS INDIA PRIVATE LIMITED [Strike Off] CIN = U60231PN2000PTC015145

Company & Directors' Information:- MOVERS-N-PACKERS INDIA PRIVATE LIMITED [Strike Off] CIN = U60231PN2000PTC015146

Company & Directors' Information:- J. S. PACKERS PRIVATE LIMITED [Active] CIN = U36991UP1995PTC018211

Company & Directors' Information:- V J MOVERS PRIVATE LIMITED [Strike Off] CIN = U60231DL2004PTC131550

Company & Directors' Information:- LEO AND LEO (INDIA) PRIVATE LIMITED [Strike Off] CIN = U31900DL1985PTC022100

Company & Directors' Information:- PACKERS (INDIA) PRIVATE LIMITED [Strike Off] CIN = U14102KA1999PTC024636

Company & Directors' Information:- PACKERS PRIVATE LIMITED [Active] CIN = U21010MH1968PTC014058

Company & Directors' Information:- K B S PACKERS PVT LTD [Strike Off] CIN = U99999UP1972PTC003540

Company & Directors' Information:- S A E MOVERS PRIVATE LIMITED [Active] CIN = U72200PN2001PTC016159

Company & Directors' Information:- A & A PACKERS PRIVATE LIMITED [Active] CIN = U63090UP2011PTC047868

Company & Directors' Information:- S H K PACKERS PRIVATE LIMITED [Strike Off] CIN = U21000HP2013PTC000458

Company & Directors' Information:- MOVERS PRIVATE LIMITED [Under Liquidation] CIN = U00349KA1976PTC002985

    Final Order No. A/30239/2017 in Appeal No. ST/419/2017

    Decided On, 21 February 2017

    At, Customs Excise Service Tax Appellate Tribunal Regional Bench Hyderabad

    By, THE HONORABLE JUSTICE: DR. SATISH CHANDRA
    By, (PRESIDENT) AND THE HONORABLE JUSTICE: MADHU MOHAN DAMODHAR
    By, MEMBER

    For Petitioner: Vijay Kumar and K.S. Krishna Prasad, Advocates And For Respondents: Arun Kumar, Deputy Commissioner (AR)



Judgment Text


1. Issue in question is liability to discharge Service Tax on the services provided by the appellant. Department has taken the view that the services are cargo handling services and liable to Service Tax. In adjudication proceedings a demand thereto of Rs. 20,19,552/- with interest liability thereon and imposition of penalties under Sections 76, 77 and 78 of the Finance Act, 1994 were confirmed. The Commissioner (Appeals) in his order dated 31-7-2007 (Impugned Order) observed that appellant is liable to pay Service Tax under the category of "Cargo Handling Services" but remanded the matter for re-computation. Being aggrieved, the appellant has knocked the door of the Tribunal. Today when the matter came up for hearing, on behalf of the appellant ld. Counsel Shri Vijay Kumar contended that the activities provided by them were nothing but Goods Transport Agency (GTA) services. He also made the following submissions at strength of written note:

"(i) Leo Packers and Movers is engaged in the business moving personal effects/household goods from one place to another place. Their business has a predominant character of transportation and they have been discharging Service Tax under "Transportation of Goods By Road" Service with effect from 1-1-2005. (sub-clause (zzp) of Section 65(105) of the Finance Act, 1994). Department has also accepted the said classification from 1-1-2005.

(ii) Dispute is about the period prior to 1-1-2005. A show cause notice dated 12-2-2005 was issued demanding service tax of Rs. 21,47,083/- for the period from 16-8-2002 to December 2004 under Cargo Handling Service along with interest and proposing to impose penalty. The Show Cause Notice was issued under extended period of limitation.

(iii) Issue is no longer res Integra and stands settled by orders of the Tribunal.

(iv) The impugned services are appropriately taxable under GTA Service with effect from 1-1-2005 and no tax can be demanded for the period prior to 1-1-2005 under any other entry.

(v) Their business activity of movement of household goods appropriately fits into "Goods Transport Agency" and not under "Cargo Handling Service" as defined under Section 65(23) of the Finance Act, 1994.

(vi) Same is also covered by C.B.E. & C. Circular No. 104/7/2008-S.T, dated 6-8-2008 which clarified that the activity merits classification under GTA service."

2. On the other hand, ld. AR Shri Arun Kumar supports the adjudication. Heard both sides and have gone through the facts. There is no doubt that the activity of the appellants during the impugned period has been clarified by C.B.E. & C. in Circular No. 104/7/2008-S.T, dated 6-8-2008, as GTA service only. The relevant portion of the Circular is reproduced below:

"3. Issue: GTA provides service to a person in relation to transportation of goods by road in a goods carriage. The service provided is a single composite service which may include various intermediary and ancillary services such as loading/unloading, packing/unpacking, transshipment, temporary warehousing. For the service provided, GTA issues a consignment note and the invoice issued by the GTA for providing the said service includes the value of intermediary and ancillary services. In such a case, whether the intermediary or ancillary activities is to be treated as part of GTA service and the abatement should be extended to the charges for such intermediary or ancillary service?

Clarification: GTA provides a service in relation to transportation of goods by road which is a single composite service. GTA also issues consignment note. Composite service may include various intermediate and ancillary service provided in relation to the principal service of the road transport of goods. Such intermediate and ancillary services may include services like loading/unloading, packing/unpacking, transshipment, temporary warehousing etc., which are provided in the course of transportation by road. These services are not provided as independent activities but are the means for successful provision of the principal service, namely, the transportation of goods by road. The contention that a single composite service should not be broken into its components and classified as separate services is a well-accepted principle of classification. As clarified earlier vide F. No. 334/4/2006-TRU dated 28-2-2006 (para 3.2 and 3.3) and F. No. 334.1/2008-TRU, dated 29-2-2008 (para 3.2 and 3.3), a composite service, even if it consists of more than one service, should be treated as a single service base on the main or principal service and accordingly classified. While taking a view, principle is to identify the essential features of the transaction. The method of invoicing does not alter the single composite nature of the service and classification in such cases are based on essential character by applying the principle of classification enumerated in section 65 A. Thus, if any ancillary/intermediate service is provided in relation to transportation of goods, and the charges, if any, for such services are included in the invoice issued by the GTA, and not by any other person, such service would form part of GTA service and, therefore, the abatement of 75% would be available on it.

4. Issue 2: GTA providing service in relation to transportation of goods by road in a goods carriage also undertakes packing as an integral part of the service provided. It may be clarified whether in such cases service provided is to be classified under GTA service.

Clarification: Cargo handling service [Section 65(105)(zr)J means loading, unloading, packing or unpacking of cargo and includes the service of packing together with transportation of cargo with or without loading, unloading and unpacking. Transportation is not the essential character of cargo handling service but only incidental to the cargo handling service. Where service is provided by a person who is registered as GTA service provider and issues consignment note for transportation of goods by road in a goods carriage and the amount charged for the service provided is inclusive of packing, then the service shall be treated as GTA service and not cargo handling service."

Moreover, the issue is in favour of the appellant as pe

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r the ratio laid down in the following cases that this type of activity falls under category of GTA: "(i) CCE, Raipur v. Drolia Electrosteels (P) Ltd. [2016 (43) S.T.R. 261 (Tri.- Del.)] (ii) M/s. R.K. Transport Company v. CCE, Raipur [2012-TIOL-290-CESTAT-DEL] and (iii) M/s. Arjuna Carriers Pvt. Ltd. [2016 (41) S.T.R. 632 (Tri.-Del.)]" In view of the clarification in the Board's Circular (supra) and also following the ratio of the above case laws, we hold that the activity of appellant also does indeed fall under the category of GTA. We therefore set aside the impugned order and allow the appeal with consequential benefits, if any, as per law.
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