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TMI Blog2023 (1) TMI 1185X X X X Extracts X X X X X X X X Extracts X X X X ..... merit in the demand of service tax under the head of business auxiliary service against the appellant. The demand on this count is set aside and the appeal on this count is allowed. Demand under the head of supply of tangible service - HELD THAT:- Neither show cause notice nor the impugned order gives any grounds to substantiate the claim that the physical possession and effective control of the equipment is not transferred to the clients but is retain to the appellant. In these circumstances, there are no evidence to support the charges levied on the appellant in regard to supply of tangible goods service - Demand on this count is also set aside and appeal is allowed. Demand under the category of rent-a-cab service - HELD THAT:- There are substantial force in the argument of the appellant that this is not a service provider/ service recipient relationship. The appellants are not in the business of rent a-cab providing rent a cab service and any recovery is made for private use of vehicle are in terms of the employment agreement. Thus, there are no merit in the argument of the Revenue - Demand on this count is also set aside and appeal is allowed. Appeal allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.3 Learned counsel pointed out that the Revenue is seeking to charge service tax under the category of Business auxiliary service, in the category of provision of service on behalf of the client. Learned counsel pointed out that the government of Gujarat is supposed to be the client of the appellant learned counsel pointed out that government of Gujarat is not engaged in any kind of business to qualify for any service under the category of business auxiliary service and therefore there cannot be any service in the nature of business auxiliary service that can be provided to the government . 2.4 Learned counsel further pointed out that they are merely being reimbursed for the salary paid to the employees and the administrative expenditure and the said reimbursement does not amounts to any consideration for purpose of levy of service tax. He further pointed out that 100 % shares of the appellant are owned by the Government. In these facts of the case learned counsel argued that the activity of managing the schemes for soil conservation and land reclamation do not amount to provision of business auxiliary service . 2.5 Learned Counsel further pointed out tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or maintenance of a vessel Notification 25/2012 dated 20.06.2012 defines government authority as follows :- (i) A board or any other body set up by an Act of Parliament or State Legislature; or (ii) Established by Government; With ninety percent, or more participation by way of equity or control to carry out any function entrusted to a municipality under Article 243 W of the Constitution. Learned counsel argued that they are also entitled to the exemption as they are engaged in providing service to government which covered by article 243W. He relied on the 12th Schedule under article 243 W reads as under:- Article 243. Powers, authority and responsibilities of Municipalities etc. Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow- (a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to- (i) the preparation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants are 100 % owned by the government. Business auxiliary service is defined as follows : (19) Business auxiliary service means any service in relation to - (i) Promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client, or (*******) (iii) any customer care service provided on behalf of the client, or (iv) procurement of goods or services, which are inputs for the client, or [ Explanation :- For the removal of doubts, it is hereby declared that for the purposes of this subclause, inputs means all goods or services intended for use by the client;] [(v) production or processing of goods for, or on behalf of, the client;] (vi) provision of service on behalf of the client, or (vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, mana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e raised in the impugned order is relates to demand under the head of supply of tangible service. It has been argued by learned counsel in the written submission that the bull dozers/ dumpers are given on lease and the same was operated lessee. It has been argued that the bull dozers/ dumpers given by them on lease are under the possession and control of the lesseses It has been argued that there is a contract of bailment which implies that the possession and control of the equipment is transferred to the lessee. It has been argued by the learned counsel that no person of the appellant organization operates the said bull dozers/ dumpers leased out . It has been argued that the terms of contract specifically prohibits lessee not to transfer, assign and charge mortgage , sublet sale or dispose of in any way part with the possession of machinery. He argued that this position clearly indicate the possession of goods is transferred to the lessee. 5.1 We find that neither show cause notice nor the impugned order gives any grounds to substantiate the claim that the physical possession and effective control of the equipment is not transferred to the clients but is retai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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