TaxTMI 
TaxTMI 
2026 (6) TMI 13
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....t initiated an enquiry by way of issuing letters/summons. In response to the enquiry, the appellant provided copies of financial records, such as Form 26AS statements, IT return acknowledgements, along with Profit and Loss Account and Balance Sheet, as well as sample copies of agreements/ work orders, service tax paid invoices, etc. In the course of such enquiry, a statement was also recorded from the appellant wherein he has stated that he is providing "Transport of goods by road" and "Supply of tangible goods" services and provided a list of his service receivers. The appellant has deposed that he had collected service tax from his service receivers in respect of supply of tangible goods services but not in respect of transport of good services. He has also deposed that due to shortage of funds he had not paid the service tax in full and further the service receivers had also not paid the amounts due to him in time and that he had filed the ST-3 returns only for the year 2012-13. On perusal of the records produced by the appellant, the Department was of the view that the appellant has provided taxable services under the categories "Supply of Tangible Goods Services" (SOTGS), and ....
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....classified its activity of transporting heavy machines and their accessories by road under the category of Goods Transport Agency Service (GTA) as under section 65(50b) for the period prior to 01.07.2012 and under section 66B for the period post 01.7.2012. It is further contended that the liability to discharge Service tax on GTA services was always on the recipient of service by virtue of Sl. No. A (iv) of Notification No. 36/2004-ST dated 31.12.2004 for the period prior to 01.7.2012 and under Sl. No. I(A)(ii) of Notification No.30/2012-ST dated 20.06.2012 for the period post 01.07.2012. 4. Ld. Counsel further submits that with respect to ECIS the liability to pay service tax was on the appellant and accordingly, he raised invoices with Service tax. However, since Gamesa Wind Turbine Pvt Ltd did not make full payment of the invoice value to the appellant, he discharged tax to the extent of amounts received. Ld. Counsel further submits that consequent to enquiry and investigation, the Department was of the view that the transportation of cranes using trailers by the appellant, is not a GTA Service, but a service of supply of tangible goods for use. The Department has also allege....
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....rvice under GTA service has been rejected on the grounds that the appellant did not issue consignment notes and that the consideration is recorded as 'hire charges' and not 'freight charges'. Drawing attention to the definition of GTA under Section 65(50b) and rule 4B of the Service tax rules, 1994 dealing with issuance of consignment note, it is argued that any document which contains the details mentioned in the explanation to Rule 4B can be called a consignment note. Ld. Counsel therefore argued that the appellant in his reply has clearly stated that they have issued invoices/bills to their customers mentioning all the requisite details. However, the respondent has not recorded any findings with respect to the same. Reliance was placed on the decision in Indiana Earth Movers, 2025 (9) TMI 194-Cestat Chennai, wherein though the assessee had not issued consignment note it was held that the service has to be treated as GTA service as the assessee therein had collected freight charges. Ld. counsel further argues with respect to the finding on consideration being 'hire charges' and not 'freight charges', that the appellant's customers have used the term 'transportation charges' in so....
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.... of 6 months/1 year and that the credit was claimed by the appellant in 2014, based on the invoices raised on them during the years 2009-10 to 2013-14; it is submitted that the limitation prescribed under Rule 4(1) of the CCR, Rules 2004 was introduced by way of an amendment only in 2014 and applies only for the invoices issued after the amendment i.e. prospectively and said limitation cannot be applied retrospectively. Reliance is placed on the decisions in EM Services (I) Pvt. Ltd., 2018 TMI 1066-Cestat, Mumbai, Amba River Coke Ltd., 2026 (2) TMI 515-Cestat, Mumbai. It is prayed that the impugned order may be set aside. 9. Ms. G. Krupa, Ld. Authorized Representative appearing for the respondent reiterated the findings in the impugned order. Ld. A.R. points out that the Adjudicating Authority has studied the scope of the work orders under which the services were provided by the service provider and has discussed one such work order after reproducing the same in the Order in Original and has found that the right of possession and effective control is with the service provider and the same has not been transferred to the service receiver at any point in time and hence the service....
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....issues, it is imperative to delve into the statutory provisions as well as the existing jurisprudence as developed by the Honourable Apex Court, while dealing with these statutory provisions and what has been laid down as the essential requirements to come within their ambit. Before 01-07-2012 The definition of Supply of Tangible Goods Service as provided in Section 65 (105) is as under: 105) "Taxable service" means any service provided or to be provided - (a) xx xx (zzzzj)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;" After 01-07-2012 Section 65B(44) of the Finance Act, which was inserted w.e.f. 01.07.2012 defines 'service' to mean : "65B(44) "service" means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include - (a) an activity which constitutes merely, - (i) a transfer of title in goods or immovable property, by way of sale, gift or i....
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.... right to use those goods, would not arise." 14. The attributes of what a transaction should have in order to constitute a transaction for the transfer of right to use the goods has been spelt out in the concurring Judgement of A. R. Lakshmanan, J, in the Judgement of the Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd v. UOI, 2006 (2) STR 161 (SC), as under: 91. To constitute a transaction for the transfer of the right to use the goods the transaction must have the following attributes: a. There must be goods available for delivery; b. There must be a consensus ad idem as to the identity of the goods; c. The transferee should have a legal right to use the goods- consequently all legal consequences of such use including any permissions or licenses required therefor should be available to the transferee; d. For the period during which the transferee has such legal right, it has to be the exclusion to the transferor this is the necessary concomitant of the plain language of the statute - viz. a "transfer of the right to use" and not merely a licence to use the goods; e. Having transferred the right to use the goods during the....
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....illing and hence the use of the equipment is by the respondent and not the customer. The decision of the Tribunal was thus assailed before the Apex Court. 17. The Hon'ble Apex Court, after noticing that Section 65(105)(zzzzj) of the Finance Act, 1994 provided for taxability of supply of tangible goods for use, without transferring right of possession and effective control over such goods, as taxable service as well as the decision in BSNL v UOI cited supra including the elucidation of the "transfer of right to use any goods' by Dr. A.R. Lakshmanan, J and also the decision of the Apex Court in Great Eastern Shipping Company Ltd v State of Karnataka, 2020 (3) SCC 354 and also the decision in All India Federation of Tax Practitioners v UOI, (2007) 7 SCC 527, went on to hold as under: "18. The introduction of Section 65(105)(zzzzj) in the Finance Act, 1994, was with the intention of taxing such activities that enable the customer's use of the service provider's goods without transfer of the right of possession and effective control. This provision creates an element of taxation over a service, as opposed to a 'deemed sale' under Article 366(29A)(d). For the purpose of clari....
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....harbour tugs, and construction barges. The question before the Bombay High Court was whether, prior to the introduction of Section 65(105)(zzzzj) in 2008, the petitioner could be taxed on its services in relation to mining of mineral, oil, or gas under Section 65(105)(zzzy). In the present matter, we are not concerned with the merits of Shipowners', which was affirmed on appeal by this Court in Union of India v. Indian National Shipowners' Association and Anr. [2010 (14) SCC 438 = 2011 (21) S.T.R. 3 (S.C.)]. This Court explicitly restricted itself to the interpretation of Section 65(105)(zzz) while leaving the other observations on interpretation of the law, "open to be considered at length at an appropriate stage" [2010 (14) SCC 438, para 7]. We note however, the analysis of Section 65(105)(zzzzj) of the Bombay High Court, where the High Court observed : "38. Entry (zzzzj) is entirely a new entry. Whereas Entry (zzzy) covers services provided to any person in relation to mining of mineral, oil or gas, services covered by Entry (zzzzj) can be identified by the presence of two characteristics namely (a) supply of tangible goods including machinery, equipment and ap....
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....state that the crux of the dispute is whether the supply of tangible goods - the SKID equipment- is for the use of the purchaser, and thereafter goes on to hold: "26. Under Section 65(105)(zzzzj), the taxable service is provided or to be provided in relation to the supply of tangible goods for the use of another, without transferring the right of possession and effective control. The expression "use" has been defined in Black's Law Dictionary : "Use, n. Act of employing everything, or state of being employed; application, as the use of a pen, or his machines are in use. Also the fact of being used or employed habitually; usage, as, the wear and tear resulting from ordinary use. Berry-Kofron Dental Laboratory Co. v. Smith, 345 Mo. 922, 137 S.W. 2d 452, 454, 455, 456. The purpose served; a purpose, object or end for useful or advantageous nature. Brown v. Kennedy, Ohio Appellant. 49 N.E. 2d 417, 418. To put or bring into action or service; to employ for or apply to a given purpose. Beggs v. Texas Dept. of Mental Health and Mental Retardation, Tex. Civ. App., 496 S.W.2d 252, 254. To avail oneself of; to employ; to utilize; to carry out a purpose or action by means of....
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....n the context of SKID equipment postulates the utilization of the equipment for the purpose of fulfilling the purpose of the contract. Section 65(105)(zzzzj) does not require exclusivity of use. The SKID equipment is an intrinsic element of the service which is provided by the respondent, acting pursuant to the GSA, as a supplier of natural gas to its buyers", thereafter in the concluding paragraphs 37 to 39, goes on to hold in para 37 "we find ourselves in agreement with the findings of the Adjudicating Authority", and in para 39, sets aside the order of the Tribunal and restores the order of the Adjudicating Authority. 20. In yet another decision, reported as K. P. Mozika v Oil and Natural Gas Corporation Ltd, 2024 (388) ELT 11 (SC), the Hon'ble Apex Court, while deciding a group of appeals, where the assessees have, under a contract, agreed to provide different categories of motor vehicles, such as trucks, trailers, tankers, buses, scrapping winch chassis, and cranes to the Oil and Natural Gas Corporation Ltd ( ONGC) and also other cases where Indian Oil Corporation Limited had entered into agreements with transporters to provide tank trucks to deliver its petroleum products,....
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.... is for the contractor to pay for consumables like fuel, oil, etc. Even the cranes must be moved and operated by the crew members appointed by the contractor. Moreover, in case of any mishap or accident in connection with the cranes or connection with the use of the cranes or as a consequence thereof, the entire liability will be of the contractor and not of the ONGC. Thus, in short, the contract is for providing the service of cranes to ONGC. The reason is that the transferee (ONGC) is not required to face legal consequences for using the cranes supplied by the contractor. Therefore, the tests laid down in clauses (c) and (d) of Paragraph 97 of the decision of Dr. A.R. Laxmanan, J. are not fulfilled in this case. Moreover, on a conjoint reading of the aforesaid clauses, it appears that the use of the cranes provided by the contractor to ONGC will be by way of only a permissive use. Though the cranes are used for carrying out the work as suggested by ONGC, the entire control over the cranes is retained by the contractor, inasmuch as it is the contractor who provides crew members for operating the cranes, it is the contractor who has to pay for fuel, oil, etc. and for maintenance of....
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.... conclude that there is a transfer of the right to use tank trucks in favour of IOCL. Essentially, it is a contract to provide the service of transporting the goods using tank trucks to IOCL. Therefore, even in this case, all the five tests laid down by Dr. A.R. Laxmanan, J. are not fulfilled." (emphasis supplied) 21. Thereafter, the Apex Court in the said decision of K. P. Mozika v Oil and Natural Gas Corporation Ltd, 2024 (388) ELT 11 (SC), refers to Section 65 (105) (zzzzj) of the Finance Act, 1994 and expounds as to when a transaction would be that of rendering service within the meaning of the said section by holding as under: "41. Now, at this stage, we may refer to Section 65(105)(zzzzj) of the Finance Act, which was brought into force with effect from 16th May, 2008. Section 65(105)(zzzzj) reads thus : "Section 65. Definitions. - xx xx xx (1) xx xx xx (105)"Taxable service" means any service provided or to be provided - (a) xx xx xx (zzzzj) 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 ef....
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.... above work order, the scope of the work is supply of trailer to their service on hire charge basis. On going through the conditions of the said work order, it could be observed that at condition No. 4,5 6 and B are reproduced below: 4. "Hire Charges includes cost of fuel and crew Food & Accommodation" 5 Friends Road carriers shall insure its Trailers and crew All liabilities on account of workmen compensation shall be to the account of Friends Road Carriers for its work men only. The Trailers / Lorry shall be comprehensively Insured including for third party liability while travelling on its won by FRC. 6. The Health, Safety and Environment rules shall be strictly followed by FRC and Health, safety and Environment plan shall be drawn out by FRC as per RSWE requirements, on deployment of Trailers. The following valid documents should accompany the Trallers, (a) RC book (b)Tax paid receipt from origin and work place (c) Fitness certificate (d) Insurance (e) Pollution certificate with phato (1) Driving License(Heavy) 8. In case of any breakdown the same to be repaired Immediately and if it is a major bre....
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....r weights of 100 ton crane, for Flat Bed Trailer rate was Rs. 85000/- per traller to carry the tools container and for Taurus lorry to carry 12 ton Hydra crane rate was Rs. 16000/- per trailer. Needless mention that when the contract was for lump sum basis, the service provider is eligible to receive the above consideration even when the trailers were in idle condition. The specific condition providing for charges for the supply of trailers when it is not run to certain minimum distance will sufficiently establish the actual nature of the activities undertaken by the service provider and to understand the distinction between the nature of GTA service and Supply of Tangible Goods service. Under GTA service, there is no such scope for payment of hire charges for the distance not travelled. The hire charges to a transporter are payable for the transport of a particular consignment from one place to another under a standard rate of charges determined by the market conditions. Such a transportation or movement of goods on consignment basis does not require an elaborate contract as seen in the instant case of supply of trailers / cranes. 23. We have also perused yet another work order....
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....ire Charges of 01 Flat Bed Trailer for internal shifting of 330 T Crane Counter Weight & Boom from Thungavi to Dasarpatti on 31.08.2012", "Hire Charges of 01 Flat Bed Trailer for internal shifting of 160 T Krupp Crane Counter Weight & Boom from Yard to GE Kottaikarumkulam site and back on 17.10.2012" etc. It is also seen stated that the works are to be carried out for various RSWE Work sites and the terms and conditions stated are verbatim as already noticed above. 25. In our considered view, it would seem that the activities enumerated above fulfil the requirement of Section 65(105)(zzzzj) as enumerated in the decision of the Hon'ble Apex Court in Commissioner of Service Tax, Ahmedabad v Adani Gas Ltd, 2020 (40) G.S.T.L 145 (S.C), in that it satisfies the six ingredients that have to be fulfilled in order to attract the definition of a taxable service under sub-clause (zzzzj), namely, 1) Service to any person: True, it is provided to the service recipient. 2) By any other person: True, it is provided by the appellant. 3) The service is provided in relation to the supply of tangible goods, including machinery, equipment and appliances: Yes, the service....
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....f 2017, and analysing them on the anvil of the tests as laid down by Dr. A.R. Lakshmanan J in BSNL case, the Apex Court has held that the contract is for providing the services of cranes to ONGC and the use of the cranes provided by the contractor to ONGC will be by way of only a permissive use. Again, after perusing the terms and conditions of the contract which was the subject matter of challenge in Civil Appeal Nos. 3566-3569 of 2017, the clauses were found to be practically the same and it was held that in this case, also, the reasons which are recorded earlier will squarely apply. Further, in the context of Civil Appeal No.4657 of 2013, which is by and between ONGC and M/s. Ali Brothers for hiring a 20-metre-ton trailer, the Apex Court has held that looking at these clauses, it is obvious that the contractor fully controls the trailers during the contract period, and therefore, again, this is a case of a license granted to ONGC to use the trailer. Likewise, after discussing the terms and conditions of the contract in Civil Appeal No.383 of 2013, it was explicitly observed in para 40 that "The contract is to provide tank trucks for the transportation of goods. Once the tank tru....
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....held as under: "19. What is binding, therefore, is the principle underlying a decision which must be discerned in the context of the question(s) involved in that case from which the decision takes its colour. In a subsequent case, a decision cannot be relied upon in support of a proposition that it did not decide. Therefore, the context or the question, while considering which, a judgment has been rendered assumes significance. 20. As against the ratio decidendi of a judgment, an obiter dictum is an observation by a court on a legal question which may not be necessary for the decision pronounced by the court. However, the obiter dictum of the Supreme Court is binding under Article 141 to the extent of the observations on points raised and decided by the Court in a case. Although the obiter dictum of the Supreme Court is binding on all courts, it has only persuasive authority as far as the Supreme Court itself is concerned." (emphasis supplied) 30. A coordinate bench of this Tribunal, had observed in its decision by Final Order No.40683-40687/2025 dated 02.07.2025, reported in Daimler India Commercial Vehicles Pvt Ltd v. The Commissioner of CGST & C.E, ....
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.... that it would amount to rendering of GTA services. We find the reliance placed by the Adjudicating Authority on the decision in Birla Ready Mix v CCE, Noida, 2012 (12) TMI 736CESTAT, New Delhi, apposite for such negation of the appellant's contention. In any event, given the aforesaid Supreme Court Judgements and given our findings supra in light of the same as to the nature of the appellant's said activity being covered under supply of tangible goods service, we find no merit in the aforesaid contentions. 32. We are therefore of the firm opinion that the findings of the Adjudicating Authority that the appellant was rendering services under the category of "Supply of Tangible Goods Service" warrants no interference at our hands. We also do not find any merit in the appellant's contention that for the period post 01.07.2012 the appellant has not rendered a specific finding regarding the "right to use". As already observed by us supra, the Adjudicating Authority has categorically rendered a finding that the right of possession and effective control is with the appellant and the same has not been transferred to the service received at any point of time and the service is therefore....
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.... 3 returns, failed to file the statutory returns for the whole period of demand except for the year 2012-13 and thereby failed to pay the service tax and has contravened sections 68,69 and 70 of the Act with intent to evade payment of service tax. It was held that invoking extended period of limitation in the show cause notice is sustainable. It was also held that there is no case of any bonafide belief that the activities undertaken by them did not attract service tax under the category of supply of Tangible Goods Service and in light of deliberate contraventions with intent to evade payment of service tax penalty is leviable under section 78. For the said acts of commission and omission penalty under Section 77(2) was also found imposable. 35. From the appeal records, we notice that the SCN states that the appellant has given a statement that he had collected service tax from service receivers in respect of supply of tangible goods services and has not paid service tax in full due to shortage of funds since the service receivers did not pay the amounts in time and also admits to the filing of ST-3 returns only for the year 2012-13. The statement is not seen to be retracted. Th....
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....er issued any consignment note nor adduced evidence to prove that they have received only freight charges. The fact that ST-3 returns were filed erratically and that too indicating partial discharge of liability is not controverted. There is no claim of bonafides nor even a plea that the liability has been declared in the ST-3 returns correctly, though discharged partly, to show that there was no intent to evade payment of service tax. Concededly the ST-3 returns itself have not been filed for the entire disputed period, save for 2012-13. There has been no contest to the findings of the Adjudicating Authority regarding invoking the extended period of limitation either in the reply of the appellant or in the grounds of the appeal preferred before us. In these circumstances, we do not find substance in the claim that it was only issues of interpretation and that therefore the extended period of limitation cannot be invoked. We therefore find no reason to interdict the findings of the Adjudicating Authority on this aspect of invoking extended period of limitation. We are also therefore disinclined to interfere with the penalties imposed which are found to be reasonable and in line wit....
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....rder Work Order No: RSWE/ /Cr-Gen-1005/13 Original Copy WO Date: 16.03.2013 Name: Mr. Alex Bharath Customer: RS WINDTECH ENGINEER(P)LTD Rs./126 E 3, Main Road, Aralvoimozhi Kanyakumari Dist,Tamilnadu. Address: Friends Road Carriers Kuvatkinaru Trinelveli Dist, Tamilnadu. Cell-9443756698 1 .- Mail :. crane@@rswindtech.com Activity: Hiring of Trailer SI No Activity Description Qty Rate Amount - Material scope 1. Hire Charges of Flat Bed Trailer to carry the Counter weights of 100 Ton Crane from GE,kolahpur yard to Greenko site, karad on 23 Feb 2013. : INo 25000/- 25000/- Including Diesel, Accommodation Food and Conveyance. : › 2 Hire Charges of Flat Bed Traiter to carry the Tools Container from RSWE to Panama site, Karad on 01" Mar 2013. 1No 85000/- 85000/- Including Diesel, Accommodation Food and Conveyance. 3 Hire Charges of Taurus Lorry to curry 12 ton Hydra Crane from RSWE in Gudimangalam 1 No 16000/- 16000/- Including Diesel. Accommodation Food and Conveyance. Amount - Material scope 1. Hire Charges of Flat Bed Trailer to carry the Counter weights of 100 Ton Crane from GE,kolahpur yard to Greenko site, karad on 23 Feb 2013. : ....