Custom, Excise & Service Tax Tribunal
Namakkal South India Transports vs Salem on 17 June, 2025
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHENNAI
REGIONAL BENCH - COURT No. I
Service Tax Appeal No. 40448 of 2015
(Arising out of Order-in-Original No. 16/2014 (ST-COMMR.) dated 25.11.2014 passed by
Commissioner of Central Excise, No. 1, Foulks Compound, Anai Road, Salem - 636 001)
M/s. Namakkal South India Transports ...Appellant
No. 610, Salem Road,
Namakkal - 637 001.
Versus
Commissioner of GST and Central Excise ...Respondent
Salem Commissionerate, No. 1, Foulks Compound, Anai Road, Salem - 636 001.
APPEARANCE:
For the Appellant : Mr. T. Vasudevan, Advocate For the Respondent : Mr. P. Ayyamperumal, Authorised Representative CORAM:
HON'BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL) HON'BLE MR. AJAYAN T.V., MEMBER (JUDICIAL) FINAL ORDER No. 40613 / 2025 DATE OF HEARING : 25.02.2025 DATE OF DECISION : 17.06.2025 Per Mr. VASA SESHAGIRI RAO This Service Tax Appeal No. ST/40448/2015 is filed by M/s. Namakkal South India Transports (hereinafter referred to as 'Appellant') assailing the Order-in-Original No. 16/2014 (ST-COMMR.) dated 25.11.2014 passed by the Commissioner of Central Excise, Salem confirming the 2 ST/40448/2015 demand of service tax of Rs.1,68,96,669/- along with interest invoking extended period and also imposing penalties under Section 77 and 78 of the Finance Act, 1994.
2.0 Brief facts of the appeal are that the principal business of the Appellant is transportation of goods, and its constituents are M/s. Infrastructure Development Company, M/s. Sri Sakthimurugan Transports and M/s. Southern Concrete Movers.
2.1 On the basis of the intelligence gathered that the Appellant is involved in providing taxable services under the category of 'Supply of Tangible Goods Service' without being registered with the Department, a verification exercise was undertaken which has revealed that the Appellant have supplied ready mix concrete vehicles to M/s. Larsen and Toubro and M/s. Lafarge. The bills were raised on the basis of distance travelled and also depending upon the period of use of such vehicles. On scrutiny of the records and financial accounts of the Appellant, the Department came to the conclusion that the Appellant was engaged in providing the services of 'Supply of Tangible Goods Service' which came into effect in 16.05.2008. As per Section 65(105)(zzzzj) of the Act, the 'Supply of Tangible Goods Service' means 'any service provided or to be provided to any person, by other 3 ST/40448/2015 person in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring right or possession and effective control of such machinery, equipment and appliances'.
2.2 On examination of the scope of work orders and their various clauses issued by Lafarge and others, it was noticed these RMC Vehicles and Pumps are to be painted according to the direction of the plant in-charge of the service recipient, workmen are to be covered under workmen's compensation & insurance, labour laws of center and state to be followed, and in case of break down, alternate vehicles are to be provided. Also, specific number of RMC vehicles and pumps are made available during the contract period and the service recipients, viz., Lafarge and Others for their exclusive use and the Appellant is barred to deploy the vehicles at any other place and when not used for transport of RMC for minimum agreed Kilometers, compensation is to be paid at the minimum agreed rate. Thus, the Lafarge and others to whom RMC vehicles are given on hire appears to be in total control of the vehicles for their usage.
2.3 Consequently, the Show Cause Notice No. 51/2013(ST)(Commr.) dated 28.08.2013 was issued to the 4 ST/40448/2015 Appellant demanding service tax of Rs.1,68,96,719/- for the period from 01.05.2008 to 31.03.2012 for providing services under the category of 'Supply of Tangible Goods Service' to M/s. L&T and M/s. Lafarge invoking extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994.
2.4 After the due process of adjudication, the proposals in the notice have been confirmed by the Adjudicating Authority driving the Appellant to come on appeal before this Tribunal.
3.1 The Ld. Advocate Mr. T. Vasudevan has argued for the Appellant. After reiterating the grounds of appeal filed, he has contended that the essential requirement for application of the said service to fall under Section 65(105)(zzzzj) i.e., Supply of Tangible Goods is that there should be a contract for supply of goods as defined under the 'sale of goods Act' for 'use' in relation to the works done by the said service recipient wherein the said goods should be operated by the service recipient at all points of time without parting with the possession and control, which is obviously absent in their case; the written contract entered into by the Appellant and the service recipient is more specific that the vehicles are to be deployed specifically for the purpose of 5 ST/40448/2015 transportation of the ready mix concrete and also the contract neither stipulated any 'supply' nor described any 'use' of the deployed vehicles at the behest of the L&T and Lafarge; the contract have not envisaged any supply of goods and the understanding is that the Appellant transports ready mix concrete to the places of the clients of service recipients on payment of transportation charges. 3.2 Further, he has submitted that their principal business is transportation of goods by road, and they undertake this work using their own trucks and also hiring from other transporters depending upon the business requirements. They also supply trucks to various companies on a regular basis for which consignment notes are raised by them. These vehicles are used for transporting ready mix concrete to various parties of L&T and Lafarge for which consignment notes were raised for transporting the material. The freight charges for transport of goods are paid only on kilometer basis as per the trade practice and owing to the special nature of the goods, as RMC cannot be transported in a regular open body lorry, they used this special purpose vehicles to transport RMC to the place of delivery as specified by their consignors and the agreement between the Appellant and companies clearly terms it as a transport contract and the service tax is paid by the person who is 6 ST/40448/2015 paying the freight charges i.e., the consignor as per Rule 2(1)(d)(v) of Service Tax Rules, 1994. RMC companies i.e., Lafarge and others, are the consignors who have been paying the service tax on the transportation charges and the proposed levy of service tax on them on the 'Supply of Tangible Goods Service' would amount to double taxation as the consignor has already paid the service tax on the transportation service. He would submit that the Adjudicating Authority has not appreciated that these services would fall under GTA Services. The nature of their activity is clearly evident from the contract / work orders so the proposal to invoke an extended period is also not tenable.
3.3 The Ld. Advocate has relied upon the following decisions wherein the transportation of RMC and also petroleum products was held to be under GTA and not under Supply of Tangible Goods Service: -
i. Gunesh Logistics Vs. Commissioner of Central Excise & Service Tax, Jaipur-I [201=20 (37) GSTL 193 (Tri.- Delhi)] ii. Prashant Logistics Vs. C.S.T., Vadodara-I [F.O.NO.
11760/2023 dated 23.08.2023] iii. Salem District Lorry Owners Associations Vs. Commissioner of GST and Central Excise, Salem [F.O.No. 40556/2024 dated 27.05.2024] 7 ST/40448/2015 iv. M/s. Erode Lorry Owners Association Vs. Commissioner of GST & Central Excise, Salem [2019 (3) TMI 43- CESTAT CHENNAI] 4.1 The Ld. Special Counsel Mr. P. Ayyamperumal has appeared and argued for the Revenue. He has referred to the Work Order dated 15.01.2009, Contract dated 25.08.2010, Work Order No. 4007 dated 15.01.2009 and other related work orders for transportation of RMC and operating concrete pumps and then contended that the price payable is inclusive of cost of transportation of RMC, fuel, lubricants and the operative labour and maintenance of the machinery and repairs, insurance and road tax, uniform for the drivers and cleaners and their wages including overtime and all other incidental / miscellaneous costs which cannot be termed as GTA service as in GTA service, the freight is payable for transportation of goods from the consignor's premises to the consignee's location. He submits that the price payable is inclusive of service tax and entry tax and the transporter shall make his own arrangements for providing accommodation and the transporter's workmen are required to be covered on an exclusive insurance policy and if not covered they would be covered under the company's block policy and the premium so payable will be recovered from the transporter and the transporter shall arrange to repaint 8 ST/40448/2015 the transit mixers as per the directions of the service recipient and it specifications. Supply of HDRD pumps which were placed at the disposal of the RMC stations is no way connected with the transportation of the RMC in order to qualify its classification under GTA category. RMC transit mixers cannot be held as Goods Transport Vehicles and further the Appellant has accounted for the receipt of consideration as 'Income from Hiring' in their financial statements.
4.2 He has vehemently argued that the above will clearly indicate that the service rendered is not GTA but supply of tangible goods service. He has further pointed out that the Appellant has not issued consignment note as required in terms of definition of GTA service. He would submit that in GTA Service, the vehicles are not painted with the logo and other details of the service recipient as specified in the work orders. Neither consignment notes were issued on each consignment basis. He has contended that the activity undertaken by the Appellant has to be considered in order to arrive at the correct classification of the said activities and as per Section 65A of the Finance Act, 1994, the sub-clause which provides the most specific description shall be preferred to sub-clauses providing a general description and composite services consisting of combination 9 ST/40448/2015 of different services which cannot be classified in the manner specified, shall be classified as if they consisted of a single service which gives them their essential character. 4.3 He has endeavored to draw attention to the requirement of RMC trucks to be painted according to the directions of the plant in-charge. As per the contract between the RMC companies and the Appellant, workmen are to be covered under workmen's compensation insurance, labour laws of center and state to be followed, workmen to be provided with Provided Fund and ESI Cover, whenever there is a breakdown alternate vehicles are to be provided and specific number of RMC vehicles and pumps are to be made available for use by Lafarge and L&T and these remain for their exclusive use and the Appellant is debarred to let these goods on hire to others. He would submit that GTA service would not need compliance to all these conditions. 4.4 He has further submitted that in respect of contracts relating to supply of HDRD pumps, the service tax liability is specifically mentioned to be on the shoulders of the Appellant. In respect of GTA services, the transporters is required to raise the consignment note. Whereas the Appellant has raised consignment notes on monthly basis and all the important details which a consignment note 10 ST/40448/2015 should contain are not found in the monthly bills raised. He has thus prayed for rejection of the appeal by classifying the service provided under Supply of Tangible Goods.
5. We have heard both sides and considered the written and oral submissions and also the evidences available on appeal records including the case laws relied upon.
6. The main issues that are required to be decided in this appeal are: -
i. Whether the services rendered by the Appellant are to be classified under GTA services as contended by the Appellant or under Supply of Tangible Goods Service as classified in the impugned Order-in-Original No. 16/2014 (ST-COMMR.) dated 25.11.2014, and ii. Whether invocation of extended period is justified and penalties imposed are sustainable in the facts of the appeal?
7. At the outset, it is important to go through the definition of Goods Transport Agency Service and the service of Supply of Tangible Goods.
i. Section 65(50b) of the finance Act, 1994 defines Goods Transport Agency Services as follows: -
11
ST/40448/2015 "Goods Transport Agency" means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called."
From the above definition it is clear that the persons providing services of transport of goods by road are required to issue consignment notes and this condition is mandatory.
In terms of explanation to Rule 4B of the Service Tax Rules, 1994, Consignment Note is defined as a document issued by GTA against the receipt of goods for the purpose of transport of goods by road in a goods carriage. Such a consignment note must be serially numbered and must contain the following particulars: -
• The name of the consignor and consignee • Registration number of the goods carriage in which the goods are transported • Details of the goods transported • Details of the place of origin and destination • Persons liable for paying service tax, whether consignor, consignee or the goods transport agency ii. Supply of Tangible Goods Service is defined under Section 65(105)(zzzzj) of the Finance Act, 1994 as follows: -
"Supply of Tangible Goods' means any service provided or to be provided to any person, by other person in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring right or possession and effective control of such machinery, equipment and appliances."12
ST/40448/2015
8. In order to examine the above issues, it is also essential to go through the Work Orders and contracts issued by M/s. Lafarge Aggregates and Concrete India Private Limited and others and one of the Work Order dated 15.01.2009 is extracted below for ease of reference: -
"Work Order dated 15.1.2009 of M/s LAC for the period from 26.12.2008 to 25.12.2009: (Infrastructure Development Company)
a) The scope of work comprises of transportation of ready mix concrete from their existing ready mix concrete plant-1A Kanakapura road to the various job sites. The contract would also be applicable to the transportation of RMC involved in any of the RMC stations in Karnataka.
b) The price is inclusive of cost of transportation of RMC, fuel, lubricants and the operative labour, maintenance of the machinery and repairs to the same, insurance and road tax for the machinery, uniform for the drivers and cleaners and their wages / salaries in normal time / overtime as the case may be and all other incidental/ misc and sundry costs involved in the transportation of ready mix concrete.
c) The price is inclusive of all taxes and duties including service tax and entry tax on vehicles that may be applicable for this nature of contract. The price is inclusive of the cost of insurance of the transporter's men, materials and machinery.
d) The transporter shall make his own arrangement for providing accommodation for his staff, driver, cleaners and workmen.
e) Water will be provided free of cost at their RMC station, for cleaning of the equipment.13
ST/40448/2015
f) In case the transporter's workmen are not covered under an exclusive insurance policy, RMC shall cover the workmen under the company's block policy and the premium so paid will be recovered from the transporter.
g) The transit mixers employed for the transportation of RMC should be in good condition along with drivers and helpers. All materials P.O.L consumable, spares, tools and tackles will be provided by the transporter within the unit rates agreed and the adequacy of the same shall be ensured at all times during the tenure of this contract. The transporter shall provide all skilled and unskilled labour and supervisory staff necessary for executing the work. Transport of men, materials, machinery tools and tackles is the transporter's responsibility. The transporter shall arrange to repaint the transit mixers as per LAC's specifications and style to the entire satisfaction of the Plant-in-charge. At any point of time, minimum of 8 numbers of transit mixers should be put into operation for the transportation of ready mix concrete. In case of break-down of any transit mixer, it should be replaced with another transit mixer till the original transit mixer is repaired. In case any transit mixer does not run the minimum distance of 1800 KM per month, the distance not travelled will be paid at the agreed rate of Rs.33.55 per KM. LAC are agreeable to pay the transporter a minimum of 1800 KM per transit mixer per month, provided the equipment is available to them all the time, except on the authorised rest days. However, proportionate payment will be deducted for break down period less than 3 days in a month. If the break down period in a month exceeds 3 days the above minimum clause, will not be applicable for that transit mixer. Lafarge per day per transit mixer towards loss occasioned 14 ST/40448/2015 due to the above said reason and compensation for the distance not travelled also will not be applicable. Periodical maintenance and repairs will be carried out on two Sundays in a month."
It is to be noted that some of the Work Orders provide for payment of service tax by the Appellant whereas in some cases, the Contract mentions specifically that service tax will be paid by M/s. Lafarge.
9. Thus, a study of the above and other work orders / contracts as far as the transportation of RMC is concerned indicate that these are more in the nature of transportation contracts. The Appellant's business is mainly transporting goods by road and the consideration is computed on per KM basis though many other conditions mentioned as to the computation of value of payable. These Contracts / Work Orders clearly specifies that service tax is to be paid by the service recipient who is paying freight i.e., the consignor as per Rule 2(1)(d)(v) of Service Tax Rules, 1994. The Appellant has been mandated to comply with various conditions as to the operation and maintenance of these RMC vehicles, compliance to central and state laws relating to Insurance, PF, etc., and also for exclusive usage of these vehicles. We note that all these requirements placed on the Appellant would not change the 15 ST/40448/2015 nature of the contract. The primary purpose of these contracts / work orders is for transportation of RMC from one place to other as per the direction of the consignors i.e., RMC companies. The Appellant has specifically mentioned in the Bills raised & Consignment Note issued that service tax would be payable by the consignors. One of the Bills raised, and the Consignment Note issued are extracted below: - 16
ST/40448/2015 17 ST/40448/2015 It is seen that all these incorporate required details of a consignment note like the details of vehicles, consideration payable, kilo meters run, etc., though not issued per consignment basis.
10.1 Further, we note that the Tribunal Delhi and also the Tribunal Ahmedabad in the cases of Gunesh Logistics Vs. Commissioner of Central Excise & Service Tax, Jaipur-I [201=20 (37) GSTL 193 (Tri.-Delhi)] and in Prashant Logistics Vs. C.S.T., Vadodara-I [F.O.NO. 11760/2023 dated 23.08.2023] has analyzed the contracts entered into for transportation of RMC and held the service activity as 18 ST/40448/2015 classifiable under GTA service and not Supply of Tangible Goods which read as below: -
In the case of Gunesh Logistics Vs. Commissioner of Central Excise & Service Tax, Jaipur-I [201=20 (37) GSTL 193 (Tri.-
Delhi)] has held as follows: -
"19. The appellant claims to be transporting RMC in vehicles under the contract awarded by the customers, particularly Grasim Industries Ltd. and Ultratech Cement Ltd. This transportation of RMC takes place in transit mixers from the premises of the customers on the basis of work orders issued. A perusal of the work order dated 1 April, 2008 issued to the appellant by Grasim Industries Ltd. indicates that the appellant was required to load RMC in the vehicles of the appellant and transport the same to the required destinations where it was required to be unloaded. The transportation charges payable to the appellant were in two parts. The appellant was to receive Rs. 140/- per cum for the quantity of RMC transported during the month. Under the second part, the appellant was to receive Rs. 20.34 per km for distance travelled in the transportation of RMC.
20. It is clear that under the work order, the appellant was required to load RMC in the vehicles belonging to the appellant and thereafter transport the RMC to the required destination and unload it. The work order does not speak of hiring the vehicles of the appellant. In fact the appellant was required to keep all its vehicles used for providing the service under the agreement in good working condition with periodical service and repair. The Commissioner has, however concluded from a perusal of the work order that the recipient of service i.e. M/s. Grasim Industries Ltd. and M/s. Ultratech Cement Ltd. needed a large number of vehicles for transportation of RMC from their plant to the 19 ST/40448/2015 premises of the customer and they have entered into an agreement for deployment of 6M3 capacity vehicles which can be used by the recipient and serve as per their requirement. The Commissioner, therefore, observed that the appellant had given on hire vehicles to the service recipient for use in the transportation of RMC from its plant to the premises of the customer though the right to possession and effective control over the vehicles remained with the appellant and it had to deploy manpower to operate and control the vehicles.
21. This conclusion drawn by the Commissioner is a patently wrong understanding of the conditions of the work order. The appellant did not give on hire the vehicles. Even the subject matter of the "work order is for transportation of Ready Mix Concrete in vehicle/vehicles from our Jaipur 1TD Ready Mix Plant at Jaipur". The contract that has been awarded is also for transportation of Ready Mix Concrete from the plant of the appellant on the terms and conditions mentioned in the work order. Condition No. 1 of the work order is that the appellant shall load RMC in the vehicle and transport the same to the required destination and unload it at the customer's site. Merely because the work order requires the appellant to deploy a fleet of 6M3 capacity vehicles for transport of 9000 M3 of RMC every month does not mean that the appellant has given vehicles on hire. The work order only requires the appellant to ensure that it has available a fleet of vehicles adequate enough to transport a particular quantity of RMC every month. Even the transportation charges are under two heads. The first is payment of a certain amount for the quantity of RMC transported during a calendar month and a certain amount per km for the distance travelled for transportation of RMC during the month.
22. It is for this reason that the appellant had contended that the activity of transportation of RMC by road falls under the taxable service GTA. However, this contention of 20 ST/40448/2015 the appellant has not been accepted by the Commissioner for the reason that clause 12 of the work order deals with a minimum quantity of RMC to be transported per month per vehicle. According to the Commissioner, it cannot be said to be a case of transportation of goods by road by a goods transport agency "because in the case of transport of goods by road the service recipient books a vehicle for transportation of goods and pays freight for such booking for the transportation of goods". The Commissioner failed to appreciate that under the work order, the appellant was required to transport RMC for which purpose the appellant was required to load RMC in the vehicles of the appellant and transport the same to the required destination and unload it. The requirement under the work order that the appellant should have a fleet of vehicles, adequate enough to transport 9000 M3 RMC every month would not mean that the appellant had given the vehicle on hire. The Commissioner was required to examine all the conditions of the work order but the finding is based on an assumption that vehicle was hired for transportation of RMC.
23. The Commissioner also fell into an error in assuming that if a minimum load of 745 cum per month per vehicle is not loaded, then too the appellant would be entitled to payment on this minimum quantity to conclude that in this manner payment would also be made for goods that have not been transported and no consignment note would have been issued for the same.
24. Under Rule 4B of the Service Tax Rules, 1994 a consignment note is a document issued by a GTA reflecting the name of the cosigner and consignee, registration number of the goods carried in which the goods are transported, details of the goods transported, details of the place of origin and the destination and the person liable for paying the service tax. The consignment notes issued to by the appellant which are contained from the pages 112 to 21 ST/40448/2015 130 of the appeal paper book contain all the particulars as mentioned in Rule 4B and the issuance of the consignment note has not been disputed in the show cause notice.
25. It would be seen from that pre-negative list period prior to 1 July, 2012 that the following two conditions have to be satisfied for a service to fall within the purview of GTA service :-
(i) There should be transportation of goods by road; and
(ii) Issuance of consignment note by GTA for the post-negative list period from 1 July, 2012 to 31 March, 2013.
26. The following conditions have to be satisfied pre- negative list for a service to qualify as a GTA service :
(i) There should be an activity in relation to transport of goods by road;
(ii) Issuance of consignment note by the GTA;
(iii) Activity is performed by a GTA for another; and
(iv) Activity is performed for consideration.
27. It cannot be doubted that the first condition with regard to both pre-negative list and the post-negative list is satisfied since RMC has been transported by the appellant using transit mixers of the appellant by road. The second condition relating to issuance of consignment note by GTA in the pre-negative list period and the post-
negative list period is also satisfied as the appellant had issued the consignment notes. The third condition in the post-negative list period is that the activity should be performed by the GTA for another. It cannot be doubted that the appellant has undertaken the transportation of RMC for the mine owners. The fourth condition of the post- negative period is that the activity should performed for a consideration. It cannot also be doubted that the appellant is receiving consideration from the service recipient as is clear from the invoices raised by the appellant to the service recipient.
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28. Thus, 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."
10.2 The Appellant has also relied upon the Tribunal's Chennai decision in the case of Salem District Lorry Owners Associations Vs. Commissioner of GST and Central Excise, Salem [F.O.No. 40556/2024 dated 27.05.2024] wherein it was held that supply of trucks for transportation of petroleum products for OMCs to be classifiable under GTA Service: -
"5.2 The second issue is with regard to the demand made under Supply of Tangible Goods Services. Section 65(105)(zzzzj) of the Finance Act, 1994 defines the service as 'any service provided or to be provided to any person, by any other person in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring right of possession and effective control of such machinery, equipment and appliances'. In the present case, the appellant has provided transportation of goods to the oil companies. It cannot be considered as Supply of Tangible Goods Services. Even in the books, they have accounted the amount received by them as lorry freight. This indicates that the appellant has received freight charges for transportation and not hire charges. Further, the freight charges have been subject to service tax under the category of GTA services at the hands of the service recipients / oil companies. The Tribunal in the case 23 ST/40448/2015 of M/s. Erode Lorry Owners Association (supra) had considered the very same issue and held that the demand under Supply of Tangible Goods Services cannot sustain. The relevant paragraph of the decision of the Tribunal reads as under:-
"7. Coming to the tax liability on Supply of Tangible Goods, from the agreement and other facts on record it is evident that the contract was for transportation of petroleum products on which service tax under GTA has been discharged by M/s. HPCL themselves. The nature and type of arrangement between the two parties also service to indicate that there is no Supply of Tangible Goods involved in this matter. This being so, the demand made under this category also cannot be sustained and requires to be set aside. So ordered."
Following the above decision, we are of the view that the demand under Supply of Tangible Goods Services cannot sustain and requires to be set aside. Ordered accordingly."
11. Even, in the present appeal, RMC trucks were exclusively used by the Appellant to provide transportation service and not the supply of tangible goods service. These trucks have been used by the Appellant themselves, and the consideration was computed principally on KM basis, though other miscellaneous charges are also included. These vehicles are always under the control and possession of the Appellant and insistence on complying to various Central and State Government laws and other conditions would not alter the nature of service provided. It is to be noted that the RMC companies have paid service tax applicable on reverse charge basis. Demand of service tax again under Supply of Tangible Goods Service would result in double taxation. The 24 ST/40448/2015 work orders / contracts entered into have talked about transportation of RMC and not of hiring vehicles. The Appellant has never ceased to have control and possession of these RMC vehicles. The Appellant has used these vehicles and not the RMC companies for providing transportation service. Though the facts obtaining in appeal are different in certain aspects, when compared against the case laws relied upon, we are of the view that appropriate classification of the service is under GTA service.
12. Thus, after analyzing the facts in this appeal and appreciating the decisions rendered in the above cases, we hold that the nature of the service rendered is transportation of RMC and as such, the demand of service tax as made under Supply of Tangible Goods in the impugned Order-in- Original No. 16/2014 (ST-COMMR.) dated 25.11.2014 is not sustainable. Ordered accordingly.
13. Regarding the supply of concrete pumps, one of the work orders is extracted below: -
"WO No. 4007 dated 15.1.2009 of LAC for the period from 26.12.08 to 25.12.09, entered into with IDC Scope of work:
The scope of works include providing and operating minimum 1 number of concrete portable 1800 HDRD pump of a minimum of 56 M3 / hour capacity, for pumping of 25 ST/40448/2015 ready mix concrete from their existing RMC plant to the various sites of work located at various places in and around Bangalore. At all heights the rate is Inclusive of charges for the equipment and cost of the pipe lines and specials for pipe lines like bends, risers, hoses etc. operational costs viz diesel, lubricants, drivers, cleaners, transporting pipe line assembly to the sites, transporting back to RMC plant, repairs and maintenance to pump and pipe line components and insurance road tax and misc expenses like RTO etc, complete.
The price agreed is subject to escalation depending on the cost of diesel.
The price is inclusive of all taxes and duties including service tax entry tax on vehicles that may be applicable for this nature of the contract.
The price is inclusive of the cost of insurance of men, materials and machinery.
The transporter shall implement all labour law of the State and Central Govt.
Transporters obligations:
Transporter shall provide 1 number of concrete portable 1800 HDRD pump of minimum 56 CUM/hour capacity and the required length of the 150 MTS pipelines in good condition, along with drivers, operators and helpers. All the materials, P.O.L, consumable, spares, tools and tackles will be provided by you within the unit rates agreed and the adequacy of the same shall be ensured at all times during the tenure of the contract. Plant / equipment, tools and tackles shall not be removed without the company's permission.
The tractor, tempo and the concrete portable 1800 HDRD pump shall be painted according to Lafarge's specification.26
ST/40448/2015 Other terms:
The concrete portable 1800 HDRD pump will be stationed at any of their RMC stations and shall be at their disposal throughout the contract period;
Lafarge are agreeable to pay the transporter a minimum of 1500 cum per pump per month provided the equipment is available to them at all times except on authorised rest days. However, should there be any shortcomings in availability, the above minimum quantity shall not be applicable for that machine in that month. In case any pump does not run the minimum of 1500 cum per month, the minimum payable quantity i.e 1500 cum would be paid at the agreed rate less the variable cost."
14. A scrutiny of the above work order indicates that the pump was kept at the disposal of the service recipient though operated and maintained by the Appellant according to their instructions. It is to be noted that there is a clause specifically mentioning that the service tax is payable by the Appellant. The Agreement is for pumping of concrete and not for transportation of concrete pump from one site to the other. Consideration is paid on the basis of the quantity of concrete pumped. Here there is no transportation of goods from one place to other like in case of ready-mix concrete. These pumps are used either at the LAC's plant or at various work sites and as such the demand raised in respect of concrete pumps is required to be confirmed under the supply of tangible goods service.
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15. However, on the issue of invoking the extended period, it is to be observed that the classification of the service provided by the Appellant is highly contentious. The work orders issued by LAC clearly indicate that the service tax will be paid by RMC companies. The Appellant is basically a transporter of goods as such, attributing any motive to evade payment of tax on the part of the Appellant is not tenable as held by the Hon'le Supreme Court in the cases of Uniworth Textiles Ltd. Vs. Commissioner of Central Excise, Raipur [2013 (288) ELT 161 (SC)] and CC Vs. Magus Metals Pvt. Ltd. [2017 (355) ELT 323 (SC)]. Whatever the service tax paid / payable is available as Cenvat credit for the RMC companies. For these reasons, we hold that invoking extended period is not justified.
16. As such, in respect of hiring charges for the concrete pumps, service tax payable is to be computed for the normal period only. However, the Annexure to the Show Cause Notice has not given a clear breakup as to the service tax demanded in respect of charges collected on supply of RCM vehicles and HDRD concrete pumps.
17. In view of the above, the Lower Authority is directed to examine the records of the Appellant and quantify 28 ST/40448/2015 the service tax payable for the normal period on the consideration / hiring charges paid by the RMC companies to the Appellant in respect of concrete pumps. It need not be stated that the Appellant is required to pay interest along with service tax payable. However, the penalties imposed are set aside.
18. Thus, the appeal is partly allowed on the above terms.
(Order pronounced in open court on 17.06.2025) Sd/- Sd/-
(AJAYAN T.V.) (VASA SESHAGIRI RAO) MEMBER (JUDICIAL) MEMBER (TECHNICAL) MK