2014 (9) TMI 138 - AT - Service Tax

Waiver of pre-deposit - services of supply of tangible goods - adjudicating authority held that the transit mixtures are kept at the disposal of the readymix concrete manufacturers hence there is a supply of tangible goods. - Held that - Appellant has been transporting the readymix concrete to the site as directed by the manufacturers; that he employs his own drivers and cleaners for such transportation is the prima facie view that can be deduced from the agreements and documents produced before us. Counsel has made a responsible statement that for such transportation of the goods, the manufacturer / recipient of the readymix concrete discharges the goods transport agency services tax, though it is not evidenced in any form. Taking the responsible statement made by the Ld. Counsel on its face value, we find that on a similar issue, in the case of M/s. Ajay Transport 2014 (8) TMI 454 - CESTAT AHMEDABAD , this bench had an occasion to look into the issue of hiring of tankers by M/s. Ajay Transport to M/s. ONGC. We also find that the co-ordinate bench of the Tribunal in the case of M/s. Mesco Airlines Limited (2013 (3) TMI 522 - CESTAT NEW DELHI) had also an occasion to consider a similar issue in respect of hiring of helicopters by the appellant therein and granted an unconditional waiver holding that such hiring out is not supply of tangible goods - appellant in this case has made out a prima facie case for the waiver of the pre-deposit of the amounts involved. - Stay granted.

Summary

Issues:
Waiver of pre-deposit of service tax liability, interest, and penalties confirmed by the adjudicating authority for the supply of tangible goods services.

Analysis:
The appellant filed a stay petition seeking a waiver of pre-deposit of an amount of Rs. 51,25,037/- confirmed as service tax liability, interest, and penalties imposed by the adjudicating authority for rendering services of supply of tangible goods. The adjudicating authority held that the transit mixers owned by the appellant were kept at the disposal of readymix concrete manufacturers, constituting a supply of tangible goods. The appellant contended that they transported ready mix concrete, as evidenced by the contract, and referred to similar cases before the Tribunal where service tax liability was discharged by the manufacturers. The Departmental Representative argued that the hiring of transit mixers amounted to the transfer of the right to use goods, supported by a High Court judgment. The Tribunal examined sample invoices and LR copies provided by the appellant, concluding that the transportation of goods was done by the appellant's drivers, and the manufacturers discharged the goods transport agency services tax. Citing previous cases involving hiring of tankers and helicopters, the Tribunal found a prima facie case for waiver of pre-deposit, granting the application and staying the recovery till the appeal's disposal.

This judgment involved a detailed analysis of the nature of services provided by the appellant in the context of hiring out transit mixers for transporting goods. The Tribunal considered the specific terms of the agreements, sample invoices, and LR copies to determine the actual nature of the services rendered. The appellant's argument that they were engaged in transporting goods, not supplying tangible goods, was supported by previous cases where service tax liability was discharged by the recipients of the services. The Tribunal also distinguished the High Court judgment cited by the Departmental Representative, emphasizing the specific facts and circumstances of the present case. By examining the responsibilities of the appellant in transporting goods and the discharge of service tax liability by the recipients, the Tribunal concluded that a prima facie case existed for waiving the pre-deposit amount.

In conclusion, the Tribunal allowed the appellant's application for waiver of pre-deposit and stayed the recovery of the amounts involved until the appeal's final disposal. The decision was based on a thorough analysis of the agreements, invoices, and the actual conduct of the appellant in transporting goods, distinguishing it from the supply of tangible goods services. The Tribunal's decision was supported by previous cases involving similar issues, providing a comprehensive and reasoned judgment on the matter.