TaxTMI 
TaxTMI 
2018 (5) TMI 887
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....t. Ltd.) are aggrieved by the confirmation of service tax under the heading 'Supply of Tangible Goods'. The appellants are engaged in supply, installation and operation of digital camera equipment having Qube digital technology to various theatre owners on 'right to use' basis through an agreement entered with the parties. In terms of the said agreement/LOU, the theatre owners pay a non-refundable deposit and also pay 'per show fee' and in addition to this the appellant will have exclusive right of 20 mts. advertising time for every show. Further, the appellant has to install, commission and maintain all the appliances at their cost and these shall always remain the property of the appellants. The department was of the view that the supply ....
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....under sub-clause (f) of Section 66 E - declared services. He pointed out that Section 65 B (44) sub-clause (ii) specifically excludes activity which involves transfer, delivery or supply of goods, which is deemed to be a sale within the meaning of clause 29 A of article 366 of the Constitution. That the activity rendered by the appellants was analysed by the Tribunal in the above stated Final Order wherein the Tribunal held that the activity is a deemed sale and does not fall under the category of 'Supply of Tangible Goods' service. That, therefore the issue stands covered by the appellant's own case for the period after July, 2012 also. He prayed that the demand may be set aside. 4. The Ld. AR, Shri B. Balamurugan, AC, reiterated the fi....
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....s have not transferred the right of possession. That since the appellant has retained certain rights and also put down conditions that the theatre owners shall ensure that the appliances connected to the VSAT remains switched on all times that is 24 hours a day in order to enable the appellant to have access to the QCP would amount to retaining the effective control over the equipment. In the decision of G.S. Lamba & Sons Vs. State of Andhra Pradesh (supra), the Hon‟ble High Court has summarized the meaning and transfer of possession as well as retaining effective control over machinery. The relevant portion of the decision is as under:- "30. From the judicial decisions, the settled essential requirement of a transaction for ....
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....ansfer of right of possession and effective control of such goods, the said activity would not fall under "supply of tangible goods" service. Moreover, the appellant has furnished documents which show that the said user fee collected is assessed under the VAT Act. The levy of VAT and service tax being mutually exclusive, the demand is not sustainable on this ground also. The demand raised and related penalties will therefore require to be set aside which we hereby do. 6.2. The appellant has been discharging VAT on the said activity holding that the transfer of right to use the equipment being a deemed sale under clause 29 A of the article 366 of the Constitution. The sub-clause (f) of Section 66 E (declared services) refers to transfer o....