2024 (5) TMI 891 - AT - Service Tax

Providing roof space on buses for goods transportation not Business Support Service under Section 65(104c)

M/s. Rajasthan State Road Transport Corporation Versus Commissioner of Central Excise and Service Tax Commissionerate, Jaipur (Rajasthan)

M/s. Rajasthan State Road Transport Corporation Versus Commissioner of Central Excise and Service Tax Commissionerate, Jaipur (Rajasthan) - TMI Issues involved:The issues involved in the judgment are:1. Whether providing space on roof for transportation of parcels/goods can be considered as 'Business Support Service' by the DepartmentRs.2. Whether providing open space at bus depot for storage of parcels/goods can be considered as 'Business Support Service'Rs.3. Whether the appellant is entitled to exemption from taxability under Notification No.25/2012-STRs.Issue 1: Providing space on roof for transportation of parcels/goods:The appellant, an autonomous body, entered into an agreement with a company for providing space on buses for transportation of parcels. The Tribunal found that the appellant's role was limited to providing space, and the responsibility for booking, transit, and delivery rested with the company. The Tribunal concluded that this activity did not fall under the definition of 'Business Support Service' as per Section 65(104c). Therefore, this issue was decided in favor of the appellant.Issue 2: Providing open space at bus depot for storage:The Tribunal examined the agreement terms and found that the primary activity of the appellant was to provide open space for storage of parcels at bus depots. The Tribunal noted that the appellant charged a license fee for this space, and the responsibility for managing the parcels rested with the company. It was held that this activity did not qualify as 'Business Support Service.' Hence, this issue was also decided in favor of the appellant.Issue 3: Exemption under Notification No.25/2012-ST:The Tribunal analyzed Clause 22(b) of the notification, which pertains to services given on hire to a goods transport agency. It was observed that the agreement between the parties involved hiring of space for transportation of goods/parcels, falling under the exemption clause. The Tribunal disagreed with the lower authorities' interpretation and held that the appellant was not liable to pay service tax. Consequently, this issue was decided in favor of the appellant.In conclusion, the Tribunal set aside the previous order and allowed the appeal in favor of the appellant.