TaxTMI 
TaxTMI 
2012 (4) TMI 232
X X X X Extracts X X X X
X X X X Extracts X X X X
....e under the head of Gas Connection Charges from their industrial, commercial and domestic consumers. We find that such charges were collected for supply of pipes, measuring equipments etc. at the time of providing new gas connection to the customers and coming to the conclusion that the appellant should have paid the Service Tax treating the service as 'Supply of tangible goods', proceedings were initiated. The first Show Cause Notice was issued demanding the Service Tax for the period from 16.05.08 to 31.03.09, amounting to Rs.2,83,46,411/- with interest and proposing to impose penalty. Another Show Cause Notice was issued for the subsequent period from 01.04.09 to 31.03.10, proposing the demand of Service Tax amounting to Rs.1,99,42,077/-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ers were not using the measuring equipment and therefore cannot be said to have received any service. The service of supply of tangible goods is dependent on two points. The first point is that the service receiver should use the equipment and secondly the right of possession, should not be transferred to the customer. In this case, the customer cannot and does not use the equipment and therefore it would not fall under the service category, A portion of the amount was required to be refunded when the customer discontinues the connection. The gas connection charges receives were not for rendering any service and the appellant was governed under the Petroleum & Natural Gas Regulatory Board Act, 2006, which had fixed the amount that can be co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....w of the fact that it is the appellant who has the sole right to maintain and repair any of the portion of the equipment and the customer is required to approach only the appellant in case of any problem, would show that all their conditions are required to be fulfilled for supply of tangible goods service. 5. We have considered the submissions made by both the sides and gone through the records, documents etc. Section 65(105)(zzzzj) of Finance Act, 1994 defines the service received as under; "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 the effec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ore when the measuring equipment is supplied and installed there is a supply of tangible goods and therefore there is a service element and both the parties benefit and definitely the appellant is providing the service to facilitate measurement of supply of gas to the customer. 7. The next question that arises is whether the essential element identified above of supply of tangible goods is fulfilled in this case. We have already concluded that there is an element of service to the customer and the service is provided in relation to measuring equipment. 8. The next question that arises is whether the supply of goods is without transferring the right of possession. Ld.Counsel vehemently argued on this point and submitted that there was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....therefore the customer cannot even claim the right of possession also. On the other hand, the Company has the right to repossess the meter and other equipment at any time and whenever it is disconnected, the meter will become the property of the Company and the meter is never passed on to the customer and the customer even does not have the right of possession, but can be said to have the possession since it is in his residence or in his premises. Therefore, the supply of goods is without transfer of right of possession. As regards effective control, there is no doubt since in terms of agreement, the responsibility for maintenance and repairs lies with the appellant and the customer has no right to get it repaired from any one else. Further....