TaxTMI 
TaxTMI 
TaxTMI 
2020 (11) TMI 580
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....irmed for the period 2011-12 to 2014- 15, along with interest and penalty as proposed in the Show Cause Notice dated 14th August 2017. 2. Briefly stated, the facts of the case are that the appellant manufactures aerated water and sells the same in glass bottles of assorted sizes to its various customers such as distributors and institutional buyers for sale to the ultimate consumers. The said product is assessed under MRP based valuation under Section 4A of the Central Excise Act, 1944. While delivering such aerated water in the glass bottles, plastic crates are required to keep the glass bottles properly arranged in order to prevent any breakage of same. The right of possession and effective control of such glass bottles and plastic crate....
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....ing of section 2(39)(c) of the 2003 act and Article 366(29A) of the Constitution of India. Tax on the sale or purchase of goods within the State is a subject which falls in the State List under the Seventh Schedule to the Constitution and it is beyond the competence of the Central Government to levy Service Tax on such sale or purchase. The transfer of right to use the bottles and crates having been taxed as deemed sale of goods, there can be no question of charging any service tax in respect thereof. On August 25, 2014 a spot memo was issued by the Audit team, inter alia, with regard to taxability of rental charges in respect of bottles and crates. By a letter dated January 30, 2015, the appellant denied taxability. After nearly 3(three) y....
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....He contended that the service tax demand on glass bottles and crate rentals is not sustainable for the following reasons: (i) crate rental has been collected by various bottling units across India while selling the beverages as a consideration towards transfer of right to use (deemed sale) and such rental was liable to VAT/CST (sales tax). Transfer of Right to use was held to be liable to VAT/Sales tax by the Hon'ble Andhra Pradesh High Court in W.P. No. 25588 of 2007 in the case of Hindustan Coca Cola Beverages Pvt. Ltd. v. State of Andhra Pradesh W.P. Nos. 21115 of 2005, 856 of 2006 and 25588 of 2007. (ii) The department has accepted that the said charges cannot be taxed under service tax in case of other bottling units in West Bengal....
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....f of the respondent department, agreed that the Committee of Chief Commissioners have accepted the order in case of other assessees. 5. Heard both sides and perused the appeal records. 6. In the instant case, it is seen that the Adjudicating Authority has confirmed service tax demand on glass bottles and crate rentals under Supply of tangible goods service.It is the case of the department that the said rental charges are in the nature of supply of tangible goods service as the effective control and possession of such crates and glass bottles are not transferred by the Appellant to the customers, though it is not disputed that the Appellant Company has paid VAT on the same and has been all along assessed by the VAT authorities for such lev....
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....f its customers as to how the customers would deal with such crates and bottles once supplied. The definition of supply of tangible goods is as follows:- "Taxable services 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 effective control of such machinery, equipment and appliances" From the above definition, when there is supply of use of goods without transferring right of possession and effective control of the equipment, the same would fall within the category of supply of tangible goods service. However, in the instant case of the appellant, the entire goods ar....