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2013 (12) TMI 207 - AT - Service TaxDemand of service tax - Receipt of GTA Service - Contract entered with TMV to move ready mix from assessee s premises to TMV s various customers - Held that - Therefore, Prima facie, TMVs are on lease basis and they serve not merely the purpose of transporting the ready mix concrete but they are used for mixing and the amounts paid by them to the TMV owners cannot be treated as freight - appellant cannot be treated as recipient of GTA services and, therefore, there shall be waiver of pre-deposit of dues as per the impugned order and stay of recovery thereof till the disposal of the appeal - Stay granted.
Issues:
1. Whether the appellant can be treated as a recipient of Goods Transport Agency (GTA) services for the period in question? Analysis: The appellant, engaged in the manufacture of ready mix concrete, entered into a contract with owners of Transit Mixer Vehicles (TMVs) to transport the concrete to construction sites. The department treated the appellant as a recipient of GTA services from the TMV owners, demanding service tax along with interest and penalties. The appellant argued that the TMVs were on a long-term lease basis, and the payments to owners were not freight but lease charges, thus not constituting GTA services. The Tribunal agreed, noting that the TMVs were used not just for transportation but also for mixing, and the payments were not freight. Therefore, the Tribunal held that the appellant cannot be considered a recipient of GTA services, waiving the pre-deposit of dues and staying the recovery pending appeal. This judgment clarifies the distinction between lease charges and freight in the context of GTA services, emphasizing the use of TMVs for mixing besides transportation. It highlights the importance of the nature of payments made to vehicle owners in determining the applicability of GTA services. The decision provides guidance on interpreting such arrangements involving transportation of goods and the implications for service tax liabilities.
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