TaxTMI 
TaxTMI 
2023 (8) TMI 707
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....ratech 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 customer under a contract between the transporter and M/s. Ultra....
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....ppellant. 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) CCE vs. Narmada Chematur Pharma - 2005 (179) ELT 276 (SC) (d) CCE vs. Textile Corporation - 2008 (231) ELT 195 (SC) (e) C....
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....mittee 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 Limited which are as follows:- "Work order for transportation of RMC in Vehicle from our Surat 11 Ready Mix Plants at Surat With reference to your offer and our subsequent discussion, we are pleased to hereby a....
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.... 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 the necessary documentations. All charges related to permission obtaining will be borne by you. ............... 29. The vehicle shall be maintained in good working condition and kept safety compliant, ie. all headlights. Tail lights, indicators, brake etc. shall be regularly checked and kept in good condition. ............... 36. Receipts of Goods You will issue cons....
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....n 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 dated 1 April, 2008 are reproduced below :- "1. You shall load material (Ready Mix Concrete) in your Vehicles, transport the same to the required destinations unload the material at customer sites, return and take another load on similar basis in a clean vehicle in accordance with prudent industrial practices. 2. For this purpose you will deploy fleet of 6 M3 Capacity of vehicles mounted on suitable chassis in numbers adequate to t....
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....y 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 consignment note, by whatever name called;" 16. The corresponding taxable service under Section 65(105)(zzp) is as follows :- 'taxable service' means any service provided or to be provided- to any person, by a goods transport agency, in relation to transport of goods by road in a goods carriage;" 17. On the other hand, the taxable entry for supply of taxable goods is contained in Section 65(105)(zzzzj) and is as follows :- "65(105)(zzzzj) to any person, by any other person in relation to supply of tangible goods including machinery, equipment and appliances for use,....
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.... 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 in the transportation of RMC from its plant to the premises of the customer though the right to possession and effective control over the vehicles remained with the appellant and it had to deploy manpower to operate and control the vehicles. 21. This conclusion drawn by the Commissioner is a patently wrong understanding of the conditions of the work order. The appellant did not give on hire the vehicles. Even the subject matter of the "work order is for transportation of Ready Mix Concrete in vehicle/vehicles from our Jaipur 1TD Ready Mix Plant at Jaipur". The contract that has been awarded is also for transportation of Ready Mix Con....
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....um 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 tax. The consignment notes issued to by the appellant which are contained from the pages 112 to 130 of the appeal paper book contain all the particulars as mentioned in Rule 4B and the issuance of the consignment note has not been disputed in the show cause notice. 25. It would be seen from that pre-negative list period prior to 1 July, 2012 that the following two conditions have to be satisfied for a service to fall within the purview of GTA service :- (i) There should be transportation of goods by road; and (ii) Issuance of consignment note by GTA for the post-negative list period from 1 July, 2012 to 31 March, 2013. 26. The following conditions hav....