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TMI Blog2025 (1) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... rom MCB. Resultantly, we hold that the impunged activity was that of giving cranes on Hire instead of it being wrongly classified as Supply of Tangible Goods . The Commissioner (Appeals) has not given any reason on which basis the effective control and possession was held to be with the appellant. Apparently and admittedly, appellant has not collected any tax from Municipal Corporation Bhopal on the invoices raised to MCB. There are no reason to consider the invoice amount to be inclusive of service tax. Conclusion - The effective control and possession with respect to cranes given to MCB was not with the appellant. The right to possession and effective control are crucial in determining service tax liability under Supply of Tangible Goods Service. The demand is held to have been wrongly confirmed - appeal allowed. - DR. RACHNA GUPTA, MEMBER (JUDICIAL) AND MRS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) Shri Sandeep Mukherjee, Chartered Accountant for the Appellant Shri Harshvardhan, Authorized Representative for the Respondent ORDER M/s Bhopal Crane Trading Company, the appellant, is a partnership firm engaged in the business of supplying cranes to Bhopal Municipal Corporation, Bhopal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 76, 77(1)(a) 78 of the said Act. A late fee of Rs. 20,000/- per half yearly return for non-filing / delayed filing of ST-3 return for the period April, 2007 to March, 2012 was also imposed under Section 70 of the said Act. Being aggrieved with the impunged order, the appellant has preferred this appeal. 2. We have heard Shri Sandeep Mukherjee, learned Chartered Accountant for the appellant and Shri Harshvardhan, Authorized Representative for the department. 3. Learned Chartered Accountant for the appellant mentioned that Municipal Corporation, Bhopal (MCB) was engaged for impounding of vehicles inappropriately parked as directed by the Traffic Police in the area falling under the Jurisdiction of Municipal Corporation, Bhopal. During the course of the impounding, the two wheelers were to be loaded onto the vehicles and four wheelers were to be towed from the place where those were found improperly parked and were taken to the Jurisdictional Police Station. MCB had entered into an agreement with the appellants for providing cranes for said loading/ towing. As per the said agreement the remuneration for this work was agreed to be a fixed sum of money per month, to be paid for, from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el.) 5. Having heard both the parties and perusing the record of the present appeal, we observe following to be admitted facts: 1. Appellants were providing cranes to Municipal Corporation Bhopal on a fixed monthly charge of Rs. 54,999/- per crane. 2. The cranes were being used by the traffic police Bhopal for impounding the vehicles i.e. for discharging a sovereign function. 3. Service tax is not charged from Municipal Corporation Bhopal, a governmental authority. 4. The cranes used to remain parked in the concerned police station during the period of the agreement. 5. MCB used to pay the crane charges from the amount of penal charges recovered from the owners of impounded vehicles. 6. The maintenance of crane and the cost the driver of the crane, however, was to be borne by the appellants. 6. We now need to look into the definition of Supply of Tangible Goods which activity has been made taxable w.e.f. 16.5.2008. As per Section 65(105)(zzzzj) this activity means any service provided or to be provided to any person, by any other person in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring the right to possession and eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f goods by inserting a new Clause (29A) and to insert a new Entry 92-A in the Union List in the Seventh Schedule and to amend Articles 269(1) and 286(3) of the Constitution of India to be in consonance with the other proposed amendments. As a result, the Constitution (Forty-sixth Amendment) Act, 1982 was enacted. The new definition in Article 366 (29A), which reads as under. 366. Definitions (29A) tax on the sale or purchase of goods includes (a) a tax on the transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration; (b) a tax on the transfer of property in goods whether as goods or in some other form involved in the execution of a works contract; (c) a tax on the delivery of goods on hire purchase or any system of payment by instalments; (d) a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; (e) a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; (f) a tax on the supply, by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Article 366 of the Constitution makes the position very clear. While referring to the transfer, delivery or supply of any goods that takes place as per sub-clauses (a) to (f) of clause (29A), the latter part of clause (29A) says that such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made . The object of the new definition introduced in clause (29A) of Article 366 of the Constitution is, therefore, to enlarge the scope of tax on sale or purchase of goods wherever it occurs in the Constitution so that it may include within its scope the transfer, delivery or supply of goods that may take place under any of the transactions referred to in sub-clauses (a) to (f) thereof wherever such transfer, delivery or supply becomes subject to levy of sales tax. 13. We also observe that Commissioner (Appeals) has not given any reason on which basis the effective control and possession was held to be with the appellant. Apparently and admittedly, appellant has not collected any tax from Municipal Corporation Bhopal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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