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Hiring of bullock-carts not liable to service tax

The issue is whether giving bullock-carts on consideration amounts to supply of tangible goods service. As per the definition of tangible goods service it includes machinery, equipment and appliances. Bullock-carts prima facie cannot be considered as machinery, equipment or appliances. In view of this, the applicants have made out a case for total waiver for hearing of the appeal.

CESTAT, MUMBAI BENCH

Sahakar Maharshi Shankarrao Mohite Patil SSK Ltd.

versus

Commissioner of Central Excise, Pune-III

ORDER NOS. S/1075/2012/CSTB/C-I & A/614/2012/CSTB/C-I

APPLICATION NO. ST/St./1346 OF 2012†

APPEAL NO. ST/409 OF 2012

JULY 24, 2012

ORDER

S.S. Kang, Vice-President  

Heard both sides.

2. The applicant filed the application for waiver of pre-deposit of Service Tax of Rs. 3,71,579/-, interest and penalty.

3. The adjudicating authority confirmed the demand under the category of supply of the tangible goods as per Section 65(105)(zzzj) of the Finance Act, 1994. The applicants filed appeal before the Commissioner (Appeals) alongwith application for waiver of pre-deposit of the dues. The Commissioner (Appeals) directed the appellant to deposit Rs 1,85,789/- for hearing of the appellants appeal. As the appellant has not complied with the condition of the stay order, the appeal was dismissed for non-compliance of the provisions of Section 35F of the Central Excise Act, 1944.

4. The contention of the applicant is that as per Section 65 of the Finance Act, 1994, taxable service means 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 applicants are engaged in the manufacture of sugar and molasses and the applicants are only supplying bullock-carts and they have entered into an agreement with one Seva Sangh and under that agreement the bullock-carts were given to the Sangh for transporting the sugarcane to the factory. The contention of the applicant is that bullock-carts cannot be treated as equipment, machinery or appliances. Therefore, the applicants are not liable to pay service tax under the supply of tangible goods service. Hence the demand is not sustainable.

5. The Revenue relies upon the findings of the lower authority to submit that as the applicants had given on hire the bullock-carts so the applicants are covered by the taxable service. Hence the demand is rightly made.

6. The issue is whether giving bullock-carts on consideration amounts to supply of tangible goods service. As per the definition of tangible goods service it includes machinery, equipment and appliances. Bullock-carts prima facie cannot be considered as machinery, equipment or appliances. In view of this, the applicants have made out a case for total waiver for hearing of the appeal.

7. Stay petition allowed.

8. As noted above, the Commissioner (Appeals) has not decided the appeal on merits. Therefore, the impugned order is set aside and the matter is remanded to the Commissioner (Appeals) to decide afresh on merits after affording an opportunity of hearing to the appellant.

9. Appeal is allowed by way of remand.

Categories: Service Tax
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