Commissioner of Service Tax II Kolkata Vs Computer Exchange Private Limited (Calcutta High Court)
Calcutta High Court held that supply of computers and its hardware like servers, printers, computer peripherals, etc. with transfer of right to use doesn’t come within the purview of ‘supply of tangible goods’ for use as per provision of section 65(105)(zzzzj) of the Finance Act.
Facts- In the present case, the department alleges that the assessee are providing server, computers, printers, computer peripherals, etc. to different clients on hire without transferring right to use of such tangible goods as they have restricted removal/shifting of the equipment from one location to another. According to the department such restricted right to use the equipment can never be construed as ‘transfer of right to use’. Furthermore, the maintenance and repairing of the said computers and accessories are being carried out either by the assessee or by their approved agent. Thus, it was alleged that the assessee are effectively retaining control over the said computers and accessories and such transaction cannot be termed as ‘deemed sale’ but are more appropriately classified as ‘supply of tangible goods’ services.
Tribunal allowed the appeal of the assessee. Being aggrieved, revenue has preferred the present petition.
