2013 (1) TMI 660

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.... been passed wherein it has been held that hiring of chartered air craft by the appellant is classifiable under the category of "supply of tangible goods services" and leviable to tax. On this ground, Service Tax amounting to Rs.1,73,92,144/- with interest has been demanded and penalty equal to this amount has also been imposed. In addition, smaller amounts have also been demanded which are mainly payable as service receiver by the appellant in respect of services received from the service provider abroad and all these small amounts have been paid by the appellant and appropriated by the adjudicating authority and since the amounts are small and paid, we do not consider it necessary to discuss these services while considering the stay appli....

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.... is essential that the recipient of the service is provided with the goods which he is free to use in any manner within the desired time limit. According to him, the service provided by them is service of transportation and not supply of air craft. Further, in the supply of tangible goods service, the service recipient is putting tangible goods into use and in this case there is no such situation. 3. Ld.A.R., on the other hand, would submit that the observations of Hon'ble High Court in Para 37 in the case of Indian National Shipowners Association shows that when the vessels are given on time charter basis to oil and gas transporters to carry out off-shore exploration and production activities, the right of possession and effective contr....

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....ce in that case, the definition specifically provides that the service is in relation to scheduled or unscheduled air transport of passengers. The thrust in the definition is on transport of passengers. In the case of the appellant, the service is provided to various companies, who chartered the air craft for specific time or for specific journey. The payment is not based on number of passengers and the appellant is not concerned with travelling also. No tickets are issued to the passengers and no charges are collected from the passengers. Therefore, the service provided cannot be considered as transport of passengers, but has to be considered as charter of air craft. There is no doubt that the right of possession and effective control whil....