TMI Blog2023 (8) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... of RMC from their plant to their customer s site and the charges for such transportation is also on the basis of quantity of the goods and per kilometer basis. It is also observed from the clauses of the contract that entire operation and maintenance activity is the responsibility of the appellant only. The contract also prescribes that essential consignment notes of loads and obtain proper receipt from the customers after goods are delivered. It is also the fact that all the transporters to charge M/s. Ultratech Cement Limited as recipient of service for discharging service tax of such transportation. On the basis of these facts, it is absolutely clear that the appellant are providing service of transportation of goods whereas the demand is raised under the category of service of Supply of Tangible Goods for Use. There are no hesitation to opine that as per facts of the present case, the activity cannot be classified under the supply of Tangible Goods for Use service therefore, the demand cannot be sustained. In the case of Gunesh Logistics [ 2019 (9) TMI 1419 - CESTAT NEW DELHI] , this Tribunal held that the appellant has been rendering GTA service by transporting RMC fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ponsibility 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. Ultratech Cement Limited. In an identical case of Gunesh Logistics vs. CCE ST 2019 (9) TMI 1419, while dealing with a similar issue involved in the present case, activity of transportation of RMC undertaken for the same service recipient will attract service tax under the category of Supply of Tangible Good for Use or under the category of Goods Transport Age ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly 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) CCE vs. Jamshedpur Beverages - 2007 (214) ELT 321 (SC) (f) CCE vs. Coca Cola India (Pvt.) Limited. - 2007 (213) ELT 490 (SC) (g) International Auto Limited vs. CCE - 2005 (183) ELT 239 (SC) (h) Bharat Wagon Engg. Co. Limited vs. Commissioner of C. Ex., Patna, (146) ELT 118 (Tri-Kolkata). (i) Goenka Woollen Mills Limited. vs. Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 award you contract for transportation of RMC from our plants at Surat on the terms and conditions as given below : 1. (a) You shall transport the RMC to the desired destination in your vehicle in accordance with prudent industrial practices (b) You may also be required to transport slurry or water from our plant to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x 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 consignment notes for all loads customers after the goods are delivered. You will provide us the copies of consignment notes and of customer acknowledgement and also submit reports to us in the formats supplied by us at the required intervals. From the plain reading of the above terms and condition of the contract, it is absolutely clear that M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder 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 transport 9000 M3 of Ready Mix Concrete every month. 3. The services shall commence within 15 days from the date of acceptance of this work order. 11. Transportation Charges: The transportation charges payable to you shall be as below : (a) Rs. 140/- per cum for quantity of Ready Mix Concrete transported during a calendar month; and ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions 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, without transferring right of possession and effective control of such machinery, equipment and appliances; Post-Negative List 18 . Section 66B provides that there shall be levied a tax to be referred to as service tax on the value of all services, other than those services specified in the neg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey 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 Concrete from the plant of the appellant on the terms and conditions mentioned in the work order. Condition No. 1 of the work order is that the appellant shall load RMC in the vehicle and transport the same to the required destination and unload it at the customer's site. Merely because th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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 have to be satisfied pre-negative list for a service to qualify as a GTA service : (i) There should be an activity in relation to transport of goods by road; (ii) Issuance of consignment note by the GTA; (iii) Activity is performed by a GTA for another; and (iv) A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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