TaxTMI 
TaxTMI 
2025 (3) TMI 507
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....ible goods service 2 15.09.2015 2013-14 5,78,816/- Works contract service 3 04.04.2016 2014-15 7,13,828/- Works contract service 2. The appellant is registered with the service tax department for providing "erection, commissioning and installation services" as defined under section 65 (105) (zzd) of the Finance Act, 1994 The Finance Act. The appellant was investigated by the anti-evasion wing of the service tax commissionerate and it came to the conclusion that the appellant had also rendered the service of "supply of tangible goods" service chargeable to service tax under section 65 (105)(zzzzj). It was found that the appellant had supplied 1000 KVA DG sets to Panipath-Jalandhar LPG pipeline which activity appeared to be chargeable to service tax under section 65 (105)(zzzzj). Accordingly, a show cause notice dated 05.07.2013 was issued SCN. 3. Another SCN dated 15.09.2015 issued as it was found that the appellant had sold DG sets to its customers and also erected, commissioned and installed them. It was felt that such contracts were composite contracts including the sale of the DG sets and rendering services of erection commissioning and instal....
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.... b. There must be consensus ad idem as to the identity of the goods; c. The transferee should have a legal right to use the goods consequently all legal consequences of such use including any permissions or licenses required therefore should be available to the transferee; d. For the period during which the transferee has such legal right it has to be the exclusion to the transferee this is the necessary concomitant of the plain language of the statute-viz, a " transfer of the right to use" and not merely a licence to use the goods; e. Having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same rights to others. (vi) The first condition is that there must be goods for delivery and the fulfillment of this condition is not in dispute because the appellant had supplied DG sets to its customers by M/s IOCL; (vii) The second condition is that there must be a consensus ad idem as to the identity of the goods. In their case the DG sets were installed and there was no dispute or confusion about which DG sets were being leased out. Therefore, the second condition wa....
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....d any works contract service. The statement of demand has been made assuming 25% growth in the value of the taxable services provided over the previous year. This demand, therefore, cannot be sustained and needs to be set aside. (xiii) Since the demand is not sustainable the interest and penalties also cannot be sustained and, therefore, they need to be set aside. Submissions on behalf of the Revenue 6. Learned authorized representative appearing for the department reiterated the discussion and findings in the order-in-original and order-in-appeal. 7. We have considered the submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the department and perused the records. 8. The demand of service tax in the two show cause notices and the statement of demand are based on the DG sets supplied on lease by the appellant to IOCL and the DG sets sold by the appellant to its customers. 9. With respect to the DG sets which were supplied and leased by the appellant, the demand is made in the first show cause notice under the head "supply of tangible goods services". In the contract under which DG sets were sol....
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....involved in the execution of a works contract; (c)a tax on the delivery of goods on hire-purchase or any system of payment by installments; (d)a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; (e)a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; (f)a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made;" 13. Thereafter, in 1994 the Central Government, in exercise of the powers under entry 97 (residual entry) of list-1, imposed service tax. The se....
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...., the appellant had no right to use them as well. Therefore, the IOCL enjoyed the legal right to use them for the period of lease. 20. The last requirement is that the goods having been transferred the transferor should have no right to transfer them to somebody as well. It is evident from the agreement that the appellant had no right to transfer the same goods to others as well. The DG sets once installed for a period by the appellant will be under the exclusive control and meant for the exclusive use of IOCL. 21. In view of the above, we find that only VAT could have been charged by the State Government on the DG sets supplied by the appellant to IOCL. No service tax under section 65 (105)(zzzzd) could have been charged. Therefore, the demand in the first show cause notice cannot be sustained and needs to be set aside. 22. As far as the second show cause notice is concerned, the appellant had sold DG sets and the sale had a condition of sale the appellant also had to install and commission them. No separate amount was charged by the appellant in installation or commission. The case of the department is that since the appellant had not only sold the DG sets but also insta....