2021 (9) TMI 71

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....d and is engaged in leasing workwear to their clients on the conditions mentioned in the agreements entered with their clients. Terms and Conditions of sample agreements is as under:- (i) That the appellant undertook to deliver, wash and service individual customized workwear to the clients. Each worker will be provided with the workwear of his size which will be measured by the appellant along with logo and labels as specified. (ii) The appellant would own the workwear and will have exclusive right to wash and service the same. (iii) The workwear shall be collected by the customer once a week for being sent to Lindstrom for servicing. (iv) If the workwear cannot be leased because of wear and tear, it wil....

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....ted by learned counsel that in the activity carried out by the appellant, the right of possession of garments is fully transferred to the client and goods are under effective control of the clients. The clients could use the garments at their own free will. The supplier has not imposed any restriction in use of the garments. The ownership always remained with appellant. The law distinguishes between ownership and possession. Till the garments are redeemed, the ownership of the workwear remains with the appellant. However, possession and the right to use is transferred to the buyer or the lessee. As the ownership of workwear remains with the appellant, it is his discretion and duty to maintain the same properly. Washing and proper upkeep of ....

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.... 6. The issue that arises for consideration is whether the activity of work wear rental falls under the category of supply of tangible goods so as to attract service tax. The terms and conditions of the agreement has been briefly incorporated in the order in original which is as under:- "The terms and conditions of the agreement are as follows:- a. The assessee will only lease the work wear to their customers / clients b. The assessee arranges the fittings which finally determine the needed number of specific work wear and service free per product is charged for the same. LSIP is entitled to take an inventory of all products. c. The assessee owns the leased work wear and keeps the exclusive right of ....