TaxTMI 
TaxTMI 
2025 (6) TMI 1176
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....are M/s. Infrastructure Development Company, M/s. Sri Sakthimurugan Transports and M/s. Southern Concrete Movers. 2.1 On the basis of the intelligence gathered that the Appellant is involved in providing taxable services under the category of 'Supply of Tangible Goods Service' without being registered with the Department, a verification exercise was undertaken which has revealed that the Appellant have supplied ready mix concrete vehicles to M/s. Larsen and Toubro and M/s. Lafarge. The bills were raised on the basis of distance travelled and also depending upon the period of use of such vehicles. On scrutiny of the records and financial accounts of the Appellant, the Department came to the conclusion that the Appellant was engaged in providing the services of 'Supply of Tangible Goods Service' which came into effect in 16.05.2008. As per Section 65(105)(zzzzj) of the Act, the 'Supply of Tangible Goods Service' means 'any service provided or to be provided to any person, by other person in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring right or possession and effective control of such machinery, equipment and appli....
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....ther stipulated any 'supply' nor described any 'use' of the deployed vehicles at the behest of the L&T and Lafarge; the contract have not envisaged any supply of goods and the understanding is that the Appellant transports ready mix concrete to the places of the clients of service recipients on payment of transportation charges. 3.2 Further, he has submitted that their principal business is transportation of goods by road, and they undertake this work using their own trucks and also hiring from other transporters depending upon the business requirements. They also supply trucks to various companies on a regular basis for which consignment notes are raised by them. These vehicles are used for transporting ready mix concrete to various parties of L&T and Lafarge for which consignment notes were raised for transporting the material. The freight charges for transport of goods are paid only on kilometer basis as per the trade practice and owing to the special nature of the goods, as RMC cannot be transported in a regular open body lorry, they used this special purpose vehicles to transport RMC to the place of delivery as specified by their consignors and the agreement between the App....
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.... for providing accommodation and the transporter's workmen are required to be covered on an exclusive insurance policy and if not covered they would be covered under the company's block policy and the premium so payable will be recovered from the transporter and the transporter shall arrange to repaint the transit mixers as per the directions of the service recipient and it specifications. Supply of HDRD pumps which were placed at the disposal of the RMC stations is no way connected with the transportation of the RMC in order to qualify its classification under GTA category. RMC transit mixers cannot be held as Goods Transport Vehicles and further the Appellant has accounted for the receipt of consideration as 'Income from Hiring' in their financial statements. 4.2 He has vehemently argued that the above will clearly indicate that the service rendered is not GTA but supply of tangible goods service. He has further pointed out that the Appellant has not issued consignment note as required in terms of definition of GTA service. He would submit that in GTA Service, the vehicles are not painted with the logo and other details of the service recipient as specified in the work orders.....
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....16/2014 (ST-COMMR.) dated 25.11.2014, and ii. Whether invocation of extended period is justified and penalties imposed are sustainable in the facts of the appeal? 7. At the outset, it is important to go through the definition of Goods Transport Agency Service and the service of Supply of Tangible Goods. i. Section 65(50b) of the finance Act, 1994 defines Goods Transport Agency Services as follows: - "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." From the above definition it is clear that the persons providing services of transport of goods by road are required to issue consignment notes and this condition is mandatory. In terms of explanation to Rule 4B of the Service Tax Rules, 1994, Consignment Note is defined as a document issued by GTA against the receipt of goods for the purpose of transport of goods by road in a goods carriage. Such a consignment note must be serially numbered and must contain the following particulars: - * The name of the consignor and consignee * Registration number of the goods carriage in which....
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....cover the workmen under the company's block policy and the premium so paid will be recovered from the transporter. g) The transit mixers employed for the transportation of RMC should be in good condition along with drivers and helpers. All materials P.O.L consumable, spares, tools and tackles will be provided by the transporter within the unit rates agreed and the adequacy of the same shall be ensured at all times during the tenure of this contract. The transporter shall provide all skilled and unskilled labour and supervisory staff necessary for executing the work. Transport of men, materials, machinery tools and tackles is the transporter's responsibility. The transporter shall arrange to repaint the transit mixers as per LAC's specifications and style to the entire satisfaction of the Plant-in-charge. At any point of time, minimum of 8 numbers of transit mixers should be put into operation for the transportation of ready mix concrete. In case of break-down of any transit mixer, it should be replaced with another transit mixer till the original transit mixer is repaired. In case any transit mixer does not run the minimum distance of 1800 KM per month, the dis....
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....., though not issued per consignment basis. 10.1 Further, we note that the Tribunal Delhi and also the Tribunal Ahmedabad in the cases of Gunesh Logistics Vs. Commissioner of Central Excise & Service Tax, Jaipur-I [201=20 (37) GSTL 193 (Tri.-Delhi)] and in Prashant Logistics Vs. C.S.T., Vadodara-I [F.O.NO. 11760/2023 dated 23.08.2023] has analyzed the contracts entered into for transportation of RMC and held the service activity as classifiable under GTA service and not Supply of Tangible Goods which read as below: - In the case of Gunesh Logistics Vs. Commissioner of Central Excise & Service Tax, Jaipur-I [201=20 (37) GSTL 193 (Tri.- Delhi)] has held as follows: - "19. The appellant claims to be transporting RMC in vehicles under the contract awarded by the customers, particularly Grasim Industries Ltd. and Ultratech Cement Ltd. This transportation of RMC takes place in transit mixers from the premises of the customers on the basis of work orders issued. A perusal of the work order dated 1 April, 2008 issued to the appellant by Grasim Industries Ltd. indicates that the appellant was required to load RMC in the vehicles....
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....3 capacity vehicles for transport of 9000 M3 of RMC every month does not mean that the appellant has given vehicles on hire. The work order only requires the appellant to ensure that it has available a fleet of vehicles adequate enough to transport a particular quantity of RMC every month. Even the transportation charges are under two heads. The first is payment of a certain amount for the quantity of RMC transported during a calendar month and a certain amount per km for the distance travelled for transportation of RMC during the month. 22. It is for this reason that the appellant had contended that the activity of transportation of RMC by road falls under the taxable service GTA. However, this contention of the appellant has not been accepted by the Commissioner for the reason that clause 12 of the work order deals with a minimum quantity of RMC to be transported per month per vehicle. According to the Commissioner, it cannot be said to be a case of transportation of goods by road by a goods transport agency "because in the case of transport of goods by road the service recipient books a vehicle for transportation of goods and pays freight for such booking for the transp....
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....ty is performed for consideration. 27. It cannot be doubted that the first condition with regard to both pre-negative list and the post-negative list is satisfied since RMC has been transported by the appellant using transit mixers of the appellant by road. The second condition relating to issuance of consignment note by GTA in the pre-negative list period and the post- negative list period is also satisfied as the appellant had issued the consignment notes. The third condition in the post-negative list period is that the activity should be performed by the GTA for another. It cannot be doubted that the appellant has undertaken the transportation of RMC for the mine owners. The fourth condition of the post- negative period is that the activity should performed for a consideration. It cannot also be doubted that the appellant is receiving consideration from the service recipient as is clear from the invoices raised by the appellant to the service recipient. 28. Thus, the appellant has been rendering GTA service by transporting RMC from one place to another as per the directions of the service recipient. The finding to the contrary recorded in the impugned order by ....
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....y." 11. Even, in the present appeal, RMC trucks were exclusively used by the Appellant to provide transportation service and not the supply of tangible goods service. These trucks have been used by the Appellant themselves, and the consideration was computed principally on KM basis, though other miscellaneous charges are also included. These vehicles are always under the control and possession of the Appellant and insistence on complying to various Central and State Government laws and other conditions would not alter the nature of service provided. It is to be noted that the RMC companies have paid service tax applicable on reverse charge basis. Demand of service tax again under Supply of Tangible Goods Service would result in double taxation. The work orders / contracts entered into have talked about transportation of RMC and not of hiring vehicles. The Appellant has never ceased to have control and possession of these RMC vehicles. The Appellant has used these vehicles and not the RMC companies for providing transportation service. Though the facts obtaining in appeal are different in certain aspects, when compared against the case laws relied upon, we are of the view that ap....
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....ncrete portable 1800 HDRD pump shall be painted according to Lafarge's specification. Other terms : The concrete portable 1800 HDRD pump will be stationed at any of their RMC stations and shall be at their disposal throughout the contract period; Lafarge are agreeable to pay the transporter a minimum of 1500 cum per pump per month provided the equipment is available to them at all times except on authorised rest days. However, should there be any shortcomings in availability, the above minimum quantity shall not be applicable for that machine in that month. In case any pump does not run the minimum of 1500 cum per month, the minimum payable quantity i.e 1500 cum would be paid at the agreed rate less the variable cost." 14. A scrutiny of the above work order indicates that the pump was kept at the disposal of the service recipient though operated and maintained by the Appellant according to their instructions. It is to be noted that there is a clause specifically mentioning that the service tax is payable by the Appellant. The Agreement is for pumping of concrete and not for transportation of concrete pump from one site to the other. Consid....
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....KMS Rate/ Km Rs. Amount Rs. 1 KA 21 D 1510 TOTAL KMS 0 Already Climed As per Minimum 900 33.55 30.195.00 UPTO TO 1800 KM 73.63 , 1801 Km to 2000 Km 37.13 - 2001 Km to 2250 Km 37.98 - Above 2250 Km 38.88 2 KA 21 D 4510 TOTAL KMS 1166 Already Climed 183 As per Minimum 225.5 33.55 7.565.53 UPTO TO 1800 KM 1166 73.63 85.852.58 1801 Km to 2000 Km 37.13 2001 Km to 2250 Km 37.98 Above 2250 Km 38.88 TOTAL 1166 1,23,613.11 NET TOTAL 1,23,613.00 Rupees One lak Twenty Three Thousand six Hundred And Thirteen Only) For Infrastructure Development Company c. yuy Authorised Signatory Document 2 Cell : 94490 01710 Infrastructure Development Company Fleet Owners & Transport Contractors No. 610, Salem Road, Namakkal - 637001, Tamil Nadu. Date : Bill No: LF3 /IDC/ TM /009 DATE: 26.12.09 To The plant In -charge, M/s. Lafarage Agregates & Concrete India Pvt Ltd, RMC 3, Bangalore, Daywise Vehicle Running Kilometers DATE KA 21 D 1510 Kilometers KA 21 D 4510 26-Nov-09 NT 21 27-Nov-09 78 28-Nov-09 RMC-6 29-Nov-09 = SUNDAY 30-Nov-09 75 1-Dec-09 = 40 2-Dec-09 = 53 3-....