The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) observed that service tax is leviable on bus for carrying passengers and hence is not means of transport of goods.
M/s. Rajasthan State Road Transport Corporation (The appellant) has assailed the order-in-appeal dated 06.04.2018, whereby the order-in-original confirmed the demand of Rs.9,10,796/- towards service tax for providing ‘parcel booking’ and ‘postal mail services’ under the category of “Business Support Service” was upheld.
The counsel for the appellant submitted that Service Recipient is accountable and responsible for loading and unloading of parcels/goods, at its own costs (including but not limited to Government levies, tolls, etc.), liabilities, and risk and Managing distribution and logistics includes more than one activity. The appellant’s main service is Stage Carriage and not Business Support Services.
On the other hand, the Authorised Representative relied on the findings of the Commissioner (Appeals) that as per the agreement, only the space on roof of the buses has been given on hire and not the means of transportation that is bus has been given on hire, as the bus is primarily meant for carrying the passengers, and therefore, cannot be called a means of transport of goods. Moreover, the appellant has booked their income under ‘parcel service’ and ‘postal service’ and not under ‘hire charges’.
A Two-Member Bench comprising Binu Tamta, Member (Judicial) and Hemambika R.Priya, Member (Technical) observed that “Bare reading of Clause 22 above shows that it covers services by way of giving on hire and considering the purpose of the agreement between the two, it is applicable to the present case. Sub-clause (a) of Clause 22 is not applicable in the facts here but we find that as M/s Sai Marketing & Loading Co. being a Goods Transport Agent to whom the open space has been given on hire for transportation of goods/parcels, sub-clause (b) of Clause 22 applies as it speaks of hire to a goods transport agency, a means of transportation of goods. The exemption provided in Clause 22 covers the activity in question and therefore, the appellant is not liable to pay the service tax.”
“It was, therefore, concluded that the bus, which is primarily meant for carrying the passengers from one place to another, cannot be called the means of transport of goods and therefore, the appellant is not eligible to claim exemption under Clause 22 (b) of the notification. The said findings are unsustainable” the Tribunal noted.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
