Case Law Details
Lindstrom Service India Private Limited Vs Commissioner of Central Excise & Serive Tax (CESTAT Chandigarh)
In the instant case, in terms of agreement work-wear rented out always remains within the exclusive possession of their clients and nobody else can use the those work-wear at the same time and hence effective control to lie with the user/ clients. The appellant, therefore, does not have control over the use of the work-wear. Thus the activity is not in the nature of service under the Finance Act in both during the period prior to negative list regime and thereafter.
FULL TEXT OF THE CESTAT JUDGEMENT
1. This appeal is filed against the Order-in-Original No. 07/GDL/COMMR./FBD-2/ST/2015-16 dated 27/11/2015 passed by the Commissioner of Central Excise and Service Tax, Faridabad-II. A demand of Rs. 92,22,321/- of service tax, for period from 2010-11 to 2014-15 up to October, 2014 has been confirmed along with equal amount of penalty and applicable interest and also a penalty of Rs. 10,000/- under the provisions of Finance Act, 1994 (hereinafter referred to as “Act”) under Section 73,78,75,77 (1) (a) of the Act ibid. The demand was confirmed as per the proposal contained in the demand/ show cause notice dated 11/02/2015.
2. Brief facts of the case required for disposal of the appeal, are that the appellants are holding service registration under the Act, for providing/ receiving various services under the provisions of the Act. Acting on the intelligence that the appellant was not paying the applicable service tax in terms of the Act for providing of work-wear to their clients on rental basis in terms of agreements, a visit of the departmental officer was made on 03/11/2014. During the visit statement of Shri Syed Asif, Raja the accountant of the appellant was recorded and also various documents, including agreements for providing work-wear to the clients on the rental basis were resumed. The two such agreements, namely, with M/s Mother Diary Fruits and Vegetables Private Limited and M/s Ecocat (India) Private Limited were also provided by the appellant. Further a statement of Shri Manas Kumar, Business Unit Manager of the appellant was also recorded under Section 14 of the Central Excise Act as made applicable to the service tax matter vide Section 83 of the Finance Act. On scrutiny of document submitted by the appellant and submissions made and deposition made by Shri Syed Ali Raja and Shri Manas Kumar, Department concluded that the service provided by the appellant is covered under the category of service of „supply of tangible goods‟ classifiable under Section 65 (105) (zzzzj) of the Act prior to 01/07/2012 and thereafter under Section 65 (b) (44) read with Section 69 (f) of the Act. In the impugned order, it was, therefore, held that the activity involves supply of tangible goods, without transferring the right of effective control, which amounted to providing of taxable service for their clients that period prior to 01/07/2012 being activity of supplying of tangible goods ad defined under Section 65 (105) (zzzzj) of the Act and after 01/07/2012 under the definition of service, as per the Section 65 (b) (44) of Finance Act read with Section 67 (e) (f) of the Act, ibid.
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