Tribunal Rules in Favor of Appellant in Dispute Over Leased Property Transfer

The Tribunal set aside the Order-in-Appeal, ruling in favor of the appellant in a dispute over the transfer of furniture, appliances, and devices in a leased residential premises. The Commissioner (Appeals) had upheld a demand for the supply of tangible goods, but the Tribunal disagreed. It found that the appellant did not retain possession and control of the leased articles, except for circumstances beyond the lessee's control, thus concluding that the transferred items did not qualify as 'Supply of Tangible Goods,' leading to the service tax demand being deemed unsustainable.

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Issues:
1. Dispute regarding the transfer of furniture, electrical appliances, and devices in a leased residential premises.
2. Interpretation of whether the transfer of these articles amounts to the supply of tangible goods.
3. Application of the definition of service for supply of tangible goods under section 65(105)(zzzzj).
4. Examination of the lease agreement and the right of possession and control of the transferred items.
5. Determination of whether the transferred articles qualify as 'Supply of Tangible Goods' service for levying service tax.

Analysis:
The appeal was filed against an Order-in-Appeal where a demand related to renting immovable property was dropped, but a demand concerning the supply of tangible goods was upheld. The dispute revolved around furniture, appliances, and devices in a leased residential premises. The appellant argued that the possession of these articles was transferred to the lessee along with the premises, thus not constituting a supply of tangible goods. The Commissioner (Appeals) held otherwise, considering the articles as tangible goods supplied. The definition of service for supply of tangible goods under section 65(105)(zzzzj) was deemed relevant, emphasizing the need to retain the right of possession and effective control of the goods. The lease agreement terms were scrutinized, revealing that the possession and control of the articles were transferred to the lessee, not merely for use. The Tribunal concluded that the appellant did not retain possession and control of the leased articles, except for circumstances beyond the lessee's control. Therefore, the transferred articles did not qualify as 'Supply of Tangible Goods,' rendering the service tax demand unsustainable. Consequently, the impugned order was set aside, and the appeal was allowed.

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