Page 109 - GSTL_11th June 2020_Vol 37_Part 2

2020 ] GUNESH LOGISTICS v. COMMISSIONER OF C. EX. & SERVICE TAX, JAIPUR-I 195
ed out that it had undertaken the activity of transportation of RMC by road in
vehicles as per the work orders and that the appellant retained the possession of
the vehicle and controlled the operation/maintenance through its own driv-
ers/cleaners. The appellant also pointed out that it was paid transportation
charges comprising of a specified sum per cubic meter quantity of RMC trans-
ported as also a specified sum per kilometer for the distance travelled during the
month. The appellant, therefore, contended that the activity of transportation of
RMC by road falls under the category of taxable service of GTA and even if the
activity is considered as a composite service, then too the same would be classifi-
able under GTA based on the test of essential character of the service as contem-
plated under Section 65A of the Act. The appellant also contended that the ex-
tended period of limitation could not have been invoked.
6. The Commissioner, however, did not accept the contention of the
appellant that the agreement was for transportation of RMC by road as in the
opinion of the Commissioner, the agreement was to deploy a fleet of vehicles.
The relevant portion of the order is reproduced below :-
“From the terms and conditions of the relevant agreements I find that recip-
ient of service, i.e. M/s Grasim Industries Limited M/s. Ultratech Cement
Limited need a large number of appropriate type of vehicles for use of
transportation of ready mix concrete from their plant to the premises of
their customers. Accordingly, they have entered into an agreement with the no-
ticee requiring them to deploy fleet of 6 M3 capacity of vehicles mounted on suita-
ble chassis in adequate numbers. According to the agreements the recipient of ser-
vice can use these vehicles as per their requirement for transportation of ready mix
concrete to the customer's premises. However, it is the noticee who has to deploy
drivers and cleaners on the vehicles and carry out all the operation and mainte-
nance activities and keep the vehicles in good working condition. The noticee is also
required to comply with all the laws governing motor vehicles and obtain permis-
sions for movement of vehicles in city limit area. Hence, I find that the noticee have
hired the vehicle i.e. transit mixer to the service recipients for use in the transporta-
tion of ready mix concrete from their plant to the premises of their customers but
the right to possession and effective control over the vehicles remains with the no-
ticee themselves as they have to deploy manpower to operate and control the vehi-
cles.”
(emphasis supplied)
7. The contention of the appellant that the service provided would ap-
propriately be classifiable as GTA service was not accepted and the relevant por-
tion of the order is reproduced below :-
“These terms of the agreement show that a minimum compensation has
been agreed upon against the supply of the tangible goods i.e. transit mixer
for use and in case the transit mixer is used for transportation of quantity in
excess of the minimum assured quantity the service recipient is liable to
pay the charges according to quantity transported and the distance trav-
elled. Hence, I find that this is not a case of transportation of goods by road
or services provided by a goods transport agency because in the case of
transport of goods by road the service recipient books a vehicle for trans-
portation of goods and pays freight for such booking for transportation of
goods. The goods transport agency issues consignment note for such trans-
portation of goods. Anyone booking a vehicle for transport of goods is not
required to assure transportation of a minimum quantity of goods per vehi-
cle per month and payment of charges for such minimum quantity. A
goods transport agency cannot raise any consignment note for the quantity
which has not been transported in the vehicles and accordingly, no freight
GST LAW TIMES  11th June 2020  109