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TMI Blog2012 (4) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... with the appellant at all time and used the equipment for their own purpose – Held that:- the customer never has a right of possession since it would never become his own property at all - the Company has the right to repossess the meter and other equipment at any time and whenever it is disconnected, the meter will become the property of the Company - therefore, the supply of goods is without transfer of right of possession - the customer cannot also obtain meter and other equipment from any other source -there is no doubt that the customer also has a use of measuring equipment - the conclusion is that the appellants have provided the service and are liable to Service Tax - appellants have not been able to make prima facie case in their f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed, whereby the demand of Service Tax with interest has been confirmed and penalties have been imposed under different Sections of Finance Act, 1994. 2. On behalf of the appellant, ld.Counsel submitted that in this case, the appellant was merely supplying, installing, maintaining the measuring equipment to facilitate determination of quantum of gas can be received by them and there is no service element involved in this supply, installation and maintenance of equipment. The arrangement between the appellant and their customers was only for supply of gas and measuring equipment was supplied and installed at the customer's cost in the premises of the customer. The ownership of equipment remains with the appellant at all time and the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andum, the ld.Advocate also submitted that the Commissioner has erred in coming to the conclusion that there was no transfer of right of possession. In this case, the meters were installed in the premises of the customer and the possession was definitely with the customer only. The customer can also check the meter reading and also find the quantum of gas used by him. According to the ld.Counsel, this shows that the right of possession has been, transferred in this case and he tried to distinguish between the actual possession and right of possession in terms of Sale of Goods Act, where mere transfer of possession without transfer of property does not amount to sale and when the buyer is holding the goods of an unpaid seller and enjoys the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There should be service; ii) The service provider should be any person; iii) The service must be in relation to supply of the goods which may be tangible goods including machinery, equipments and appliances. iv) Supply of goods must be for use by the service receiver. v) Machineries, goods or appliances must be supplied without transferring right in possession and effective control of those items." 6. The first question that arises is whether the supply, installation and maintenance of measuring equipment at the premises of customer can amount to service at all. The appellant contended that the appellant is engaged in supply of gas and supply installation of equipment is a part of the activity and no ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether the right enjoyed by the customer in this case is a right of possession or not, can be illustrated by following example. "A business buys a vehicle and obtains financing. The company purchasing the vehicle becomes the registered owner and has both possession and right of possession. The financial organization providing the financing would become the lien holder and would have right of property. If the business that bought the vehicle then rented it to someone, that individual would then have possession but would not have right of possession. The company renting the vehicle to them could repossess the vehicle, for example, if they hold the vehicle past the contract period. Also, if the rental company missed payments to the lien hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he customer also has a use of measuring equipment which has already been discussed above. 10. The above discussion would show that, prima facie, the conclusion is that the appellants have provided the service and are liable to Service Tax which has been demanded. No doubt that there is a need for going into the issues and elements of service in depth in terms of statutes, meaning of various statutes and the agreement between the customer and the appellant, which can be done only at the time of final hearing. 11. Since the appellants have not been able to make prima facie case in their favour and no financial difficulty has been pleaded, we consider it appropriate that the appellant should deposit 25% of the Service Tax demanded in the i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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