CESTAT AHMEDABAD: Supply of cylinders to subsidiaries not taxable as "Supply Of Tangible Goods for use"

The Appellate Tribunal CESTAT AHMEDABAD ruled in favor of the appellant, holding that the transaction of providing cylinders to subsidiaries on a rating basis does not constitute "Supply Of Tangible Goods for use" under Section 65 (105)(zzzzj) of the Finance Act, 1994. The Tribunal relied on a previous decision in the appellant's favor on a similar issue, stating that the issue had already been conclusively settled in favor of the appellant, making the current dispute non-justiciable. The impugned order was set aside, and the appeal was allowed.

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Issues involved:
- Whether the transaction of providing cylinders to subsidiaries on a rating basis constitutes "Supply Of Tangible Goods for use" under Section 65 (105)(zzzzj) of the Finance Act, 1994.

Analysis:

The judgment by the Appellate Tribunal CESTAT AHMEDABAD, delivered by Hon'ble Member (Judicial) Mr. Ramesh Nair and Hon'ble Member (Technical) Mr. Raju, dealt with the issue of whether the appellant's provision of cylinders to their subsidiaries on a rating basis falls under the category of "Supply Of Tangible Goods for use" as per Section 65 (105)(zzzzj) of the Finance Act, 1994. The department contended that the transaction should be classified as such, leading to a demand being confirmed. However, the appellant argued that a previous decision by the Tribunal in Aims Pharma Pvt Ltd vs. C.C.E. & S.T.-Vadodara-I-2019 had ruled in their favor on a similar issue for an earlier period.

During the proceedings, the appellant's counsel, Ms. Vanashri Kalbhor, highlighted the previous favorable ruling by the Tribunal in a similar case involving the appellant. The authorized representative for the Revenue, Shri. Dharmendra Kanjani, reiterated the stance taken in the impugned order. Upon hearing both sides and examining the records, the Tribunal noted that the issue at hand was identical to the one previously decided in the appellant's favor. The show cause notice for the current case was akin to the one covered in the earlier judgment, rendering the issue no longer Res-Integra.

Relying on the precedent set by its earlier decision in the appellant's own case, dated 02.05.2019, the Tribunal set aside the impugned order and allowed the appeal. By following the same legal reasoning and factual background as in the previous judgment, the Tribunal concluded that the issue had already been decisively settled in favor of the appellant, making the current dispute non-justiciable.

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