TaxTMI 
TaxTMI 
2023 (11) TMI 723
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....ve under Section 75 of Finance Act 1994. (c) I impose a penalty of Rs. 4,34,12,380/- (Four Crore Thirty Four Lakh Twelve Thousand Three Hundred Eighty only) upon M / s Pranish Carriers LLP, G-41, Sector-39, Noida under Section 78 of Finance Act 1994. However, as per second proviso to section 78 of the Act ibid, if the party pays the adjudged amount of Service Tax alongwith interest with in a period of 30 days of receipt of this order the penalty payable shall be 25% of the above said amount provided that the reduced amount of penalty is also paid within 30 days. (d) I impose penalty of Rs. 10,000/- (Rupees Ten Thousand only) in terms of Section 77(1) (a) of the Finance Act, 1994 upon M/s Pranish Carriers LLP, G-41, Sector-39, Noida for not taking Service Tax registration under Section 69 of the Finance Act, 1994. (e) The adjudged dues will be paid henceforth." 2.1 Appellant is engaged in providing the services of GTA on which the due service tax is paid by the recipient of the service i.e. M/s INOX Air Products Ltd. [INOX]. 2.2 On the basis of information received that appellant is evading the service tax, the business-cum-residence premises of the ....
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....mits that- The agreements interred into by them with M/s Inox various units contains several terms and conditions, which explain that and effective control over these chassis continue to lie in the hands of the appellant. Further, the agreement imposes the responsibility of proper maintenance. The agreement was in respect of providing the chassis owned by the appellant to M/s Inox on hire charges which included fixed and variable charges as per travelled distance. The appellant has accepted that there was not transfer of effective control and possession of the goods i.e. chassis and in support of this the appellant has provided various documents. The essence of the contractual arrangement between the appellant and M/s Inox is rendition of services of transportation from one location to another, and not supply of the chassis as is evident from the following:- Transporting of gas from one place to another Ensuring safe and timely delivery of goods at customer's location. Providing of sufficient number of drivers/ cleaners and payment of their wages and other claims Making payments towards toll / naka charges, octroi expen....
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....guing for the revenue learned Authorised Representative reiterates the findings recorded in the impugned order and the Order-in-Original. 4.1 We have considered the impugned orders along with the submissions made in appeal and during the course of argument. 4.2 For holding against the appellant Adjudicating Authority in his order observed as follows:- 26. I find that the Show Cause Notice alleges that the activity carried out by the party is covered under the service "Supply of Tanaible Goods for Use" upto 30.06.2012 as defined under Section 65(105)(zzzzj) of the Finance Act, 1994 and under Declared Service as defined in Section 66(E)(f) w.e.f. 01.07.2012 whereas the party has submitted that the activity carried out by them is covered under category of "Goods Transport Agency" (GTA). The GTA is defined as under Section 65 (50b) as below:- "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'. 27. I intend to analyze the allegations made upon the party through impugned show cause notice in the light of legal provisions mentioned above. It has ....
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....gency providing services in relation to transportation of goods by road are covered under /within the scope of GTA and not the transportation of goods by road by any individual owner of the vehicle. The relevant Section as mentioned above clearly mentions the word 'any person' and not 'an agency'. Though, of course, issuance of consignment note is the only condition in respect of such service of transport of goods by road by any person. In the light of foregoing, I find that it is not correct to suggest that only an agency is covered under GTA. 30. Further, the party in its written defence reply has submitted that the Commissioner has placed reliance on the decisions of Bellary Iron & Ore Pvt Ltd Vs. CCE Belgam [2010 (18) STR 406 (Tri-Bang)]; Laxminarayana Mining Co v CST, Bangalore [2009 (16) STR 691 (Tri-Bang)]; Caps and Prints (P) Ltd v CST Kolkata [2013 (30) STR 426(Tri-Kolkata), to conclude that owners of vehicles/individual truck owners providing transportation services are not liable to Service Tax. It is pertinent to note the decisions of Bellary Iron (supra) and Laxminarayana (supra), pertain to a period prior to the amendment in the definition of ....
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....category of 'Goods Transport Agency Service. This observation appears to have been made by the Tribunal considering the clarification by the Finance Minister in the Budget Speech. It is a well settled position in law as clarified by the Hon ble Apex Court in Doypack Systems (Pvt.) Ltd. [1988 (36)E.L. T. 201 (S.C.)] and J.K. Spinning and Weaving Mills Ltd. [1987 (32)E.L.T. 234 (S.C.)] that when the words of the statute are plain and unambiguous, there is no need to place reliance on external aids such as parliamentary proceedings. There is no reason given as to how and why this conclusion could be reached in the light of the legal provisions for levy of Service Tax on GTA service. Under Section 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'. Section 65(105(zzp) defines taxable service as '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'. From these legal definitions it is clear that any person (including individuals) who provides service in relation to t....
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...., the correct nature of the service has to be ascertained on the basis of clauses of agreement between the party and Inox. 34. The Show Cause Notice alleges that the activity carried out by the party is covered under "Supply of Tangible Goods for Use" service upto 30.06.2012. I find that the said service has been defined under Section 65(105) (zzzzj) as, "Any service provided or to be provided to any person, by any other person in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring right of possession and effective control of such machinery, equipment and appliances". For the period starting w.e.f. 01.07.2012, the SCN alleges that the same service falls under category of 'Declared Services' as defined under Section 66E(f) of the Finance Act, 1994 as, transfer of goods by way of hiring, leasing, licensing or in any Such manner without transfer of right to use such goods'. For ascertaining the exact nature of the service provided by the party, it is imperative to analyze the terms and conditions of the agreement. 35. I have carefully gone through the terms and conditions of the agreement betwee....
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....othecate, mortgage or in any manner transfer or encumber the VITT, equipment and attendant facilities and fitting, In unlikely event of any party claiming from, through, under or against PCL and attaching the said VITT in respect of any claim which such party have or claim against PCL shall inform forthwith intimate Inox in writing of such attachment and also arrange to ensure that the attachment is forthwith removed, at its own cost, in such cases Inox shall recover all losses and damages from PCL, PCL shall not normally sell any lorry chassis which would be in the use of Inox during the agreement period and incase PCL desires to do so, PCL has to give ninety days prior written notice for the same and Inox may, at its option and without in any way being obliged to do so, allow its said VITT to be transferred at PCL's cost to a new lorry chassis, insurance of vehicle and driver etc. is responsibility of PCL, PCL has to ensure that each lorry chassis is equipped with registration books, valid pollution control certificates, road and other tax certificates and permits and driving licences, PCL shall keep lorry chassis registered in its name with the RTO, Govt, municipal or other ....
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....ide vehicle tracking system in the vehicle and PCL will pay month ly Rs. 500/- towards the cost of providing this facility, if the lorry chassis are hypothecated as a security against any type of loan or financing then PCL shall comply with the terms and conditions of the agreement for loan/financing scrupulously and ensure that there is no influence from the financers end. The above terms of agreement has to be examined scrupulously to decide whether the service provided by the party actually falls within the category of 'Supply of Tangible goods for Use' service till 30.06.2012 and transfer of goods by way of hiring, leasing, licensing or in any such manner without transfer of right to use such goods' w.e.f. 01.07.2012 onwards. I have also gone through the submissions of the party in this regard. I find that the agreement was in respect of providing the lorry chassis owned by the party to M/s Inox on hire charges which included fixed and variable charges as per travelled distance. I find that the party itself has accepted that there was no transfer of effective control and possession of the goods i.e. lorry chassis. In support of their claim they have cited various ar....
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.... supplied for use, with no legal right of possession and effective control. Transaction of allowing another person to Use the goods, without giving legal right of possession and effective Control, not being treated as sale of goods, is treated as service. 4.4.3. Proposal is to levy Service Tax on such services provided in relation to supply of tangible goods, including machinery, equipment and appliances, for use, with no legal right of possession or effective control. Supply of tangible goods for use and leviable to VAT / sales tax as deemed 'sale of goods, is not covered under the transfer of Scope of the proposed service. Whether a transaction involves possession and control is a question of fact and is to be decided based on the terms of the contract and other material facts. This could be ascertainable from the fact whether or not VAT is payable or paid." It would therefore be essential to proceed with the examination of the definition of the taxable service in the light of what has been explained above. In the definition of the taxable service indicated in Section 65 (zzzzj), the key ideas are identified as under: - ++ There must be a supply. ....
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....or a specified period) for cash, deferred payment or other valuable consideration; (e) a tax on the supply of goods by any unincorporated association or body of person to a member thereof for cash, deferred payment or other valuable consideration; (f) a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration; and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made. The Supreme Court in the aforesaid case (BSNL Vs. UO) had reiterated that the sale element in those contracts not falling under the aforesaid six clauses would be taxed depending on the substance of the contract (i.e. applying dominant nature test). Here, the intention of the parties entering into the particular transaction of sale would be important. However, in cases where the co....
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..... Commr, C. EX & S.T., BBSR-1 2022 (57) G.S.T.L. 242 (Tri. - Kolkata). The relevant portion of the said decision is reproduced herein below: "12. We also find that the same view has been consistently followed by the co-ordinate Benches of the Tribunal, the decisions which have been admitted for consideration before the Hon'ble Supreme Court in Revenue Appeals. We note that though the matter is pending before the Apex Court, the aforesaid Tribunal decisions have not been stayed and therefore, we do not find any reason to take a contrary view. In so far as the decision in Singh Transporter's case (Supra) is concerned, we agree with the arguments canvassed by the Ld. CA for the appellant that the mandatory requirement of issue of consignment note, in order to constitute "Goods Transport Agency" as has been specifically defined in the Act, was not the subject matter of examination so as to decide the taxability in the hands of assessee receiving goods transportation services and therefore, the aforesaid Apex Court's decision has no application in the instant case. 13. We find it worth taking note of the observation made by the Tribunal in JWC Logistics Pvt. Ltd. (supr....
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....ers, other cabin crew and other employees/agents engaged for transportation Clause 8. VI); g. The Appellant is required to ensure that each Lorry Chassis is equipped with registration book, Valid Pollution Control (PUC) certificate, road and other tax certificates and with all valid and subsisting permits from respective transport/road authorities and also valid driving license of the Lorry Chassis driver required for authorized road movement (Clause 8.VIII); h. The Appellant shall keep the Lorry Chassis registered in its name with the concerned R.T.O., Government, Municipal or any other authority (Clause 8.VIII); i. The Appellant is required to ensure that the drivers employed are qualified and medically fit. The Appellant is responsible for payment of wages to the drivers/cleaners who will be exclusive employees of the Appellant (Clause 8.X); j. The Appellant has to ensure that the drivers employed by it possess at least 5 years of experience in driving heavy motor vehicles of which 2 years should be of driving hazardous liquid cargo (Clause 8.XI). k. All the appointments of drivers are to be made by Owner of the Appellant and all driv....
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....rt on road, for all persons undiscriminatingly and includes a goods booking company, contractor, agent, broker and courier agency engaged in the door-to-door transportation of documents, goods or articles utilising the services of a person, either directly or indirectly, to carry or accompany such documents, goods or articles, but does not include the Government; (b) "consignee" means the person named as consignee in the goods forwarding note; (c) "consignment" means documents, goods or articles entrusted by the consignor to the common carrier for carriage, the description or details of which are given in the goods forwarding note; (d) "consignor" means a person, named as consignor in the goods forwarding note, by whom or on whose behalf the documents, goods or articles covered by such forwarding note are entrusted to the common carrier for carriage thereof; (e) "goods" includes- (i) containers, pallets or similar articles of transport used to consolidate goods; and (ii) animals or livestock; (f) "goods forwarding note' means the document executed under section 8; (g) "goods receipt" means the receipt issue....
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....nd his client was of the good transport by road, and the services so provided will be classified under the category of Good Transport Agency Service (Section 65 (105)(zzp) read with Section 65 (50b) of Finance Act, 1994 (pre amendments made by the Finance Act, 2012 and Section 65B (26) post amendments made in 2012). 4.6 Further, in the case of Shripad Concrete Pvt. Ltd. Vs Commissioner of Central Excise & ST, Surat-I 2023 (8) TMI 707- CESTAT Ahmedabad, the issue has been examined both for pre-negative list period and post-negative list period and following has been held:- "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 cus....
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....lls 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 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....
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....n 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 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 dep....
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.... 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 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 issua....
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....Bench of this Tribunal, it can be seen that the facts such as transportation of RMC by similar vehicles for M/s. Ultratech Cement Limited for transportation from M/s. Ultratech Cement Limited plant to the customer‟s site of M/s. Ultratech Cement Limited, it was held that appellant in that case are rendering GTA service by transportation RMC from one place to another as per the direction of the service recipient. Therefore, the same is not classifiable under supply of Tangible Goods for Use service. 7. Considering the above decision which is directly on the issue coupled with the facts clearly coming out from the contract, we are of the view that the appellant's service is correctly classifiable under Goods Transport Agency service for which service recipient M/s. Ultratech Cement Limited have discharged the service tax as required under Rule 2(d) of Service Tax Rules, 1994 under reverse charge basis. Therefore, the demand under the category of Supply of Tangible Goods service shall not sustain. Accordingly, the impugned orders are set-aside and the appeals are allowed." 4.7 Similar view has been expressed by this Bench in the case of M/s Narendra Road Lines Pvt. L....