Appellant Liable to Pay Service Tax on Vehicles Supplied to BSNL; Appeal Rejected; Tax Recalculation Ordered

The Member (T) held that the appellant was liable to pay service tax on the supply of vehicles to M/s. BSNL. The appellant's argument that the services were for official use was dismissed, and the Revenue's position that the vehicles were under BSNL's control for official purposes was upheld. The appellant was directed to pay service tax based on the gross amount received, as no separate amount for tax was claimed. The appeal was rejected, and the matter was remanded for recalculation of the tax amount.

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Issues: Liability of service tax on transport services provided to M/s. BSNL

Analysis:
1. Issue of Official Use: The appellant argued that the transport services provided to M/s. BSNL officers were for their official use and, therefore, should not be subject to service tax. The appellant relied on previous decisions such as R. S. Travels v. CCE, Meerut, CCE, Mangalore v. Sunil S. Kotian, and Kuldip Sing Gill v. CCE, Jalandhar to support this contention.

2. Control of Vehicles: The Revenue contended that the vehicles provided by the appellant to M/s. BSNL were under the control of BSNL, as per the clarification issued by M/s. BSNL. The Revenue argued that the vehicles were engaged by M/s. BSNL as per government guidelines for official purposes. The Revenue cited decisions like Neeraj Construction v. CCE, Jaipur and CCE, Vapi v. Bhartiben R. Patel to support their case that service tax should be applicable.

3. Judgment: After considering the arguments and case laws presented by both sides, the Member (T) held that the appellant was liable to pay service tax on the supply of vehicles to M/s. BSNL. The Member relied on the decision in Neeraj Construction case and directed the appellant to pay service tax. However, since the appellant claimed not to have received a separate amount for service tax, the Member instructed that the gross amount received should be considered as cum-tax value for recalculating the tax amount. The matter was remanded to the original authority for this limited purpose, while the appeal was rejected. The judgment was dictated and pronounced in open court by the Member (T).

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