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2023 (8) TMI 707 - AT - Service TaxClassification of services - supply of tangible goods for use or work of transportation of concrete for its customers? - providing services of transportation of Ready-mix Concrete (RMC) to Ultratech Cement Limited (RMC Division) by Transit Mixture Vehicles from batching plant of Ultratech Cement Limited, Udhna Magdalla, Surat to the construction sites. 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. HELD THAT - From the plain reading of the terms and condition of the contract, it is absolutely clear that M/s. Ultratech Cement Limited is concerned only about the transportation 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 from one place to another as per the directions of the service recipient. The finding to the contrary recorded in the impugned order by the Commissioner that the appellant was not performing GTA service but was performing STG service cannot be sustained. From the above decision of the principal Bench of this Tribunal, it can be seen that the facts such as transportation of RMC by similar vehicles for M/s. Ultratech Cement Limited for transportation from M/s. Ultratech Cement Limited plant to the customer s site of M/s. Ultratech Cement Limited, it was held that appellant in that case are rendering GTA service by transportation RMC from one place to another as per the direction of the service recipient. Therefore, the same is not classifiable under supply of Tangible Goods for Use service. Thus, the appellant s service is correctly classifiable under Goods Transport Agency service for which service recipient M/s. Ultratech Cement Limited have discharged the service tax as required under Rule 2(d) of Service Tax Rules, 1994 under reverse charge basis. Therefore, the demand under the category of Supply of Tangible Goods service shall not sustain - appeal allowed.
Issues Involved:
1. Classification of service: Whether the service provided falls under "Supply of Tangible Goods for Use" or "Goods Transport Agency Service". 2. Interpretation of contracts: Determining the true nature of the transaction based on contract terms. 3. Tax liability and computation: Whether the demand for service tax is sustainable and correctly computed. 4. Extended period of limitation: Whether the extended period for demand is applicable. Summary: 1. Classification of Service: The core issue is whether the appellant's service of transporting Ready-Mix Concrete (RMC) for Ultratech Cement Limited should be classified under "Supply of Tangible Goods for Use" or "Goods Transport Agency Service". The department contended that the appellant provided vehicles for transportation, retaining possession and control, thus falling under "Supply of Tangible Goods for Use". However, the appellant argued that their service involved mere transportation of RMC, not the supply of vehicles. 2. Interpretation of Contracts: The Tribunal examined the contract terms between the appellant and Ultratech Cement Limited. Key clauses indicated that the appellant was responsible for transporting RMC, maintaining vehicles, and issuing consignment notes. The contract specified transportation charges based on quantity and distance, emphasizing the transportation service rather than vehicle supply. 3. Tax Liability and Computation: The appellant contended that their service should be classified under "Goods Transport Agency Service", where Ultratech Cement Limited, as the service recipient, was liable for service tax under reverse charge. The Tribunal agreed, referencing the case of Gunesh Logistics vs. CCE & ST, which had similar facts and concluded that the service was not "Supply of Tangible Goods for Use". The Tribunal also noted that the computation of demand did not consider the cum-duty price, rendering the demand unsustainable. 4. Extended Period of Limitation: The appellant argued against the invocation of the extended period of limitation, asserting no suppression of facts or intent to evade tax. They maintained regular accounts and filed returns, believing in good faith that their service was not taxable. The Tribunal found no evidence of suppression and ruled that the demand was barred by limitation. Conclusion: The Tribunal concluded that the appellant's service was correctly classifiable under "Goods Transport Agency Service". As Ultratech Cement Limited had discharged the service tax under reverse charge, the demand under "Supply of Tangible Goods for Use" was not sustainable. The impugned orders were set aside, and the appeals were allowed.
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