The Customs, Excise & Service Tax Appellate Tribunal, Ahmedabad ruled in favor of the Appellant and rejected the department’s classification of service as supply of Tangible Goods.
Facts
The appellant are inter-alia engaged in providing services under the category of “Transportation of Goods Service”, “Commercial or Industrial Construction Service”, others. The appellant have provided services of 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 work orders issued by Ultratech for the aforesaid works states that the work assigned to the appellants is of transportation of RMC, wherein it is the responsibility of the appellants to transport and deliver RMC as per given schedule.
The case of the department is that the appellant by providing vehicles to Ultratech Cement Limited for transportation of goods has provided the service of supply of tangible goods for use on the ground that right of possession and effective control of the vehicle remains with the appellant.Therefore, the activity is liable to service tax under supply of tangible goods for use.
Submissions
Advocate Jigar Shah, appearing on behalf of the appellant submitted that there are various contracts for supply of identical service to M/s. Ultratech Cement Limited for transportation of RMC from their plant to the construction sites of the customer under a contract between the transporter and M/s. Ultratech Cement Limited.
Decision
The two member bench of Ramesh Nair, Member (Judicial) And C.L. Mahar, Member (Technical) found that department has sought to classify the service of the appellant under the Supply of Tangible Goods for Use service.
The bench observed 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.
The Tribunal viewed that 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.
Case title: Shripad Concrete Pvt. Limited v/s Commissioner of Central Excise & ST, Surat
Citation: SERVICE TAX Appeal No. 12453 of 2014-DB
