Edison Gentech Pvt. Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai)
The appeal challenged Order-in-Original No. 8/2016 (Reassigned) dated 31.05.2016 passed by the Commissioner of Central Excise, Chennai-III. The appellant, registered for Transport of Goods by Road/Goods Transport Agency Service and Supply of Tangible Goods for Use (STGU) Service, had been supplying diesel generator (DG) sets on rental basis since 2004. Following an investigation, the Department alleged that the appellant had failed to discharge appropriate service tax under STGU Service and had not filed ST-3 returns. A show cause notice dated 24.10.2013 proposed demand of service tax, interest and penalties for the period 2008-09 to 2011-12 under the Finance Act, 1994. The Commissioner confirmed the demands and imposed penalties under Sections 78 and 77(1)(a), leading to the present appeal.
The appellant submitted that the DG sets were delivered to customers’ premises, remained in their possession and were operated by them according to their requirements. Operators were supplied only on request, with service tax on manpower charges separately discharged under the Voluntary Compliance Encouragement Scheme (VCES). It contended that possession and effective control were transferred to customers, making the transaction a transfer of the right to use goods and a deemed sale under Article 366(29A)(d) of the Constitution, on which VAT had been paid since 2004. The appellant relied upon CBEC Circular No. 334/1/2008-TRU dated 29.02.2008, contended that diesel and oil reimbursements were not taxable, argued that the dispute was interpretational, disputed invocation of the extended period, and stated that service tax relating to transport charges of ₹68,927 had already been paid with interest before issuance of the show cause notice.
