TaxTMI 
TaxTMI 
2023 (8) TMI 707
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....ces of transportation of Ready-mix Concrete (RMC) to Ultratech Cement Limited (RMC Division) by Transit Mixture Vehicles (hereinafter referred to as 'vehicles') from batching plant of Ultratech Cement Limited, Udhna & Magdalla, Surat to the construction sites. The work orders issued by Ultratech for the aforesaid works states that the work assigned to the appellants is of transportation of RMC, wherein it is the responsibility of the appellants to transport and deliver RMC as per given schedule. 2.1 The case of the department is that the appellant by providing vehicles to Ultratech Cement Limited for transportation of goods has provided the service of supply of tangible goods for use on the ground that right of possession and effective control of the vehicle remains with the appellant. Therefore, the activity is liable to service tax under supply of tangible goods for use. 3. Shri Jigar Shah, learned Counsel along with Shri Amber Kumrawat appearing on behalf of the appellant at the outset submits that there are various contracts for supply of identical service to M/s. Ultratech Cement Limited for transportation of RMC from their plant to the construction sites of the cust....
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.... M/s. Ultratech Cement Limited is concerned only with the result performed by the appellant. He placed reliance on the following decisions:- (a) Bharat Sanchar Nigam Limited vs. UOI - (2006) 145 STC 91 (b) Lakshmi Audio Visual Inc. vs. Assistant Commissioner of Commercial Taxes - (2001) 124 STC 246 (c) Rastriya Ispat Nigam Limited vs. Commercial Tax Officer, Anddhra Pradesh - (2002) 126 STC 114 3.2 learned Counsel alternatively submits that activity of supply of RMC to M/s. Ultratech Cement Limited is properly classifiable under Goods Transport Agency service. The appellant being Goods Transport Agency service provider, is not liable to service tax as service tax liability is of service recipient, in the present case, M/s. Ultratech Cement Limited. He also submits that entire exercise is Revenue neutral as the service recipient shall be allowed to take credit of service tax if any paid by the appellant therefore, for this reason also, the demand is not sustainable. He placed on the following decisions:- (a) Amco Batteries Limited vs. CCE - 2003 (153) ELT 7 (SC) (b) CCE vs. Narayan Polyplast Limited - 2005 (179) ELT 20 (SC) (c....
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....acts. Therefore, the entire demand is hit by limitation. He placed reliance on the following decisions:- (a) NRC Limited vs. CCE - 2007 (5) STR 308 (b) Secretary, Town Hall Committee vs. Commissioner - 2007 &8) STR 170 (c) Binlas Suplux Limited vs. CCE - 2007 (7) STR 561 (d) Continental Foundation vs. CCE - 2007 (216) ELT 177 (SC) 4. Shri Rajesh Nathan, learned Assistant Commissioner, (AR) appearing on behalf the Revenue reiterates the findings of the impugned order. 5. We have carefully considered the submissions made by both the sides and perused the record. We find that department has sought to classify the service of the appellant under the Supply of Tangible Goods for Use service. The claim of the appellant is that they are not provider of vehicles on rental basis whereas they have provided service of transportation of goods i.e. RMC to M/s. Ultratech Cement Limited for transportation of their goods from M/s. Ultratech Cement Limited to the sites of their customers. To understand the actual activity of the appellant, it is necessary to go through some important clauses of the contract between the appellant and M/s. Ultratech Cement Lim....
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....of receipt. 17. Escalation: The rates per Km at Rs.33.94 mentioned in clause 11(e) are on the basis of diesel prices of Rs.56.88 per Litre In case of any variation in rates of diesel the transportation charges payable shall be increased by Rs.0.58 per Km for each Rs. 1.00 of increase in diesel rates ................. 23. Operation and Maintenance You will carry out all operation and maintenance activities at your cost. You will maintain all vehicles used for providing the service under this agreement in good working condition with periodical servicing and repair. 24 Deployment to other plants: Your contract of transportation extends to all Ready Mix plants in the city of Surat. 25. Non-exclusivity This contract with you in a non-exclusive contract and company reserves the right to appoint other/additional transporters of our RMC in the city of Surat. Similarly you also can take up transportation of other clients of yours 26. Statutory permission You will have to obtain all the statutory permission from the concerned authority for movement of vehicles in city limit area. For that purpose we will provide you all ....
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....the appellant to transport RMC from the premises of its customer to the designated places in vehicles having a rotating drum [Transit mixer] (popularly known as transit mixer) so that the concrete does not set in. The appellant claims that the consignment notes for each trip of transportation are issued by the appellant and periodical Bills are raised for transportation charges. As per the Work Orders, the transportation charges are payable partly based on the quantity of RMC transported and partly on the basis of distance travelled. The recipient of the service has been discharging Service Tax liability on a reverse charge basis as the service which the appellant claims to have been providing is "goods transport agency *GTA+". ..... ...... ...... ...... 12. In order to appreciate the submissions it would be appropriate to refer to the work orders. The first order is dated 1 April, 2008 and is for a period of three years. The second work order is dated 1 April, 2011 and is valid for the period commencing 1 April, 2011 upto 30 September, 2012. The third work order is dated 1 March, 2013 and is valid up to 31 May, 2013. The relevant terms of the first work order dat....
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....the material loaded in the Bowl is delivered at the customers' sites in good condition. In case of any loss due to improper conduct by your people the loss shall be recovered from your bills at the rate of Rs. 3000.00 per cum. 36. Receipts of Goods : You will issue consignment notes for all loads and obtain proper receipts from the customers after the goods are delivered. You shall provide us the copies of consignment notes and of customer acknowledgements and also submit reports to us in the formats supplied by us at the required intervals." (emphasis supplied) 13. The basic terms remain the same for the second and third work orders, except for a change in the transportation charges and the medium quantity. 14. Having reproduced the essential terms of the work orders, it will now be appropriate to refer to the relevant provisions in regard to the pre-negative and the post-negative list. Pre-Negative List 15. Section 65(50b) of the Act defines a 'goods transport agency' as follows :- "65(50b) 'goods transport agency' means any person who provides service in relation to transport of goods by road and issues ....
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....eceive Rs. 140/- per cum for the quantity of RMC transported during the month. Under the second part, the appellant was to receive Rs. 20.34 per km for distance travelled in the transportation of RMC. 20. It is clear that under the work order, the appellant was required to load RMC in the vehicles belonging to the appellant and thereafter transport the RMC to the required destination and unload it. The work order does not speak of hiring the vehicles of the appellant. In fact the appellant was required to keep all its vehicles used for providing the service under the agreement in good working condition with periodical service and repair. The Commissioner has, however concluded from a perusal of the work order that the recipient of service i.e. M/s. Grasim Industries Ltd. and M/s. Ultratech Cement Ltd. needed a large number of vehicles for transportation of RMC from their plant to the premises of the customer and they have entered into an agreement for deployment of 6M3 capacity vehicles which can be used by the recipient and serve as per their requirement. The Commissioner, therefore, observed that the appellant had given on hire vehicles to the service recipient for use i....
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.... of the appellant and transport the same to the required destination and unload it. The requirement under the work order that the appellant should have a fleet of vehicles, adequate enough to transport 9000 M3 RMC every month would not mean that the appellant had given the vehicle on hire. The Commissioner was required to examine all the conditions of the work order but the finding is based on an assumption that vehicle was hired for transportation of RMC. 23. The Commissioner also fell into an error in assuming that if a minimum load of 745 cum per month per vehicle is not loaded, then too the appellant would be entitled to payment on this minimum quantity to conclude that in this manner payment would also be made for goods that have not been transported and no consignment note would have been issued for the same. 24. Under Rule 4B of the Service Tax Rules, 1994 a consignment note is a document issued by a GTA reflecting the name of the cosigner and consignee, registration number of the goods carried in which the goods are transported, details of the goods transported, details of the place of origin and the destination and the person liable for paying the service....