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2023 (8) TMI 1474 - AT - Service TaxClassification of service - supply of tangible goods service to the Indian Railways - whether the appellant had transferred possession and effective control of the wagons to the Indian Railways under the terms of the Agreement? - HELD THAT - There is no manner of doubt that in terms of Clause 4.1 of the Agreement, the right of possession and effective control of the wagons had been transferred by the appellant to the Railways as the wagons provided by the appellant merged and operated under the general pool of wagons of the Indian Railways. This fact also finds support from the Certificate dated 25.03.2015 issued by the Indian Railways. The Commissioner was not justified in recording a finding that the appellant had provided supply of tangible goods service to the Indian Railways. It is not possible to sustain the impugned order dated 29.05.2015 - appeal allowed.
Issues involved:
The issue involved in this case is whether the appellant had transferred possession and effective control of the wagons to the Indian Railways under the terms of the Agreement. Judgment Summary: Issue 1: Confirmation of demand of service tax by Commissioner The order dated 29.05.2015 passed by the Commissioner confirming the demand of service tax with interest and penalty has been challenged in this appeal. The appellant contended that it had not provided supply of tangible goods service to the Indian Railways, and therefore, the demand was mis-conceived. However, the Commissioner confirmed the demand holding that the right of possession and effective control was not transferred based on the Agreement executed between the parties. Issue 2: Transfer of possession and effective control The main point to be decided in this appeal was whether the appellant had transferred possession and effective control of the wagons to the Indian Railways under the terms of the Agreement. It was observed that Clause 4.1 of the Agreement clearly indicated that the right of possession and effective control was indeed transferred to the Railways, as the wagons provided by the appellant merged and operated under the general pool of wagons of the Indian Railways. This was further supported by a Certificate issued by the Indian Railways. Conclusion Considering the above, it was held that the Commissioner was not justified in recording a finding that the appellant had provided supply of tangible goods service to the Indian Railways. Therefore, the impugned order dated 29.05.2015 was set aside, and the appeal was allowed.
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