2018 (9) TMI 1204 - AT - Service Tax

GTA Services - whether the Transit Mixer used by the respondents to transport the ready mix concrete manufactured by them to their customers would attract the mischief of levy of service tax under GTA services? - Held that - On perusal of the agreement between the respondent and the Popular Cargo Movers it becomes evident that the Transit Mixer have only been hired for a period of 3 years with full possession and control vesting with the respondents - the original authority is correct in contending that the vehicles are only been hired and that no GTA service have been provided to them - appeal dismissed - decided against Revenue.

Summary

Issues:
Classification of services under GTA services or Supply of Tangible Goods service.

Analysis:
The judgment revolves around the issue of whether the "Transit Mixer" used to transport "ready mix concrete" by the respondents should be classified under GTA services or Supply of Tangible Goods service for the purpose of levy of service tax. The adjudicating authority had initially confirmed the demand of service tax under GTA services, but the Commissioner (Appeals) overturned this decision, classifying the service under Supply of Tangible Goods. The main contention raised by the appellant was the lack of evidence regarding the transfer of tangible goods by the truck owner to the assessee, which the appellant argued was necessary for classifying the service under Supply of Tangible Goods. On the other hand, the respondent argued that the Transit Mixers were hired for a specific period and were under their full control, pointing to the agreement with Popular Cargo Movers as evidence. The respondent also cited a similar case from the High Court of Andhra Pradesh to support their argument.

Upon examination of the facts and the agreement between the respondent and Popular Cargo Movers, the Tribunal found that the Transit Mixers were indeed hired by the respondents for a fixed period with full possession and control vested in them. The Tribunal noted that the respondent consistently maintained that the vehicles were hired and not part of a GTA service. The agreement clearly indicated that the Transit Mixers were hired, not for transportation services but for possession and control by the respondents. Based on this analysis, the Tribunal upheld the lower appellate authority's decision and dismissed the appeal filed by the department. Consequently, the cross-objections filed by the respondent were also disposed of.

In conclusion, the judgment clarifies the classification of services involving the use of Transit Mixers for transporting goods and emphasizes the importance of possession and control in determining the nature of the service provided. The decision highlights the significance of contractual agreements and the actual relationship between the parties involved in such transactions when assessing the applicability of service tax under different categories.