2025 (2) TMI 479 - AT - Service Tax

Transportation services to HPCL not taxable as tangible goods supply under service tax provisions

CESTAT Chennai ruled in favor of appellant regarding service tax levy on petroleum product transportation activities. The Tribunal held that ... Levy of service tax - whether the activities of the appellant while engaged for transportation of petroleum products by road by the consignor HPCL can be subjected to levy of service tax as supply of tangible goods service? - HELD THAT:- The issue stands decided in the appellants’ favour by the decision of this Tribunal by the Final Order No.40368/2019 dated 21.02.2019 in M/s. Erode Lorry Owners Association Vs. The Commissioner of GST & Central Excise, Salem Commissionerate [2019 (3) TMI 43 - CESTAT CHENNAI] where it was held that 'Coming to the tax liability on Supply of Tangible Goods, from the agreement and other facts on record it is evident that the contract was for transportation of petroleum products on which service tax under GTA has been discharged by M/s. HPCL themselves. The nature and type of agreement between the two parties also service to indicate that there is no Supply of Tangible Goods involved in this matter. This being so, the demand made under this category also cannot be sustained and requires to be set aside.' It is found from the annexure to the statement of demand No.34/2014 dated 16-10-2014 that for the year 2013-14, the amount received by the appellants on lorry stand parking rent and the amount received on building rent put together and sought to be taxed under renting of immovable property services is very much under the threshold limit for the said year as specified under the Notification 33/2012-ST dated 20-06-2012. Conclusion - The transportation services provided did not fall under the category of supply of tangible goods service and that the amounts received under renting of immovable property service were within the exemption limit. The impugned Order in Appeal is set aside. The appeal is allowed in toto. The case involves an appeal by a lorry owners association against the demand of service tax made for the period 01-04-2013 to 31-03-2014. The Department claimed that the association had not discharged their service tax liability for various services provided. The impugned Order in Appeal upheld the demand made by the adjudicating authority, which was contested by the appellants.The main issue before the Tribunal was whether the transportation services provided by the appellants to Hindustan Petroleum Corporation Ltd (HPCL) could be subjected to service tax under the category of supply of tangible goods service. The appellants argued that since HPCL paid service tax on a reverse charge basis for the transportation services, taxing the same activity under supply of tangible goods service would amount to double taxation. They also contended that their activities under renting of immovable property service fell within the exemption limit.The Tribunal referred to a previous decision in the appellants' favor and concluded that the transportation services did not qualify as supply of tangible goods service. Additionally, the Tribunal found that the amounts received by the appellants under renting of immovable property service were below the threshold limit for each relevant year. Therefore, the demand under both supply of tangible goods service and renting of immovable property service was set aside.In the final determination, the Tribunal set aside the impugned Order in Appeal, allowing the appeal in its entirety. The appellants were granted consequential relief as per the law.In summary, the Tribunal ruled in favor of the appellants, holding that the transportation services provided did not fall under the category of supply of tangible goods service and that the amounts received under renting of immovable property service were within the exemption limit. The demand for service tax was therefore set aside, and the appeal was allowed with consequential relief.