M/s. Qube Cinema Technologies Pvt. Ltd. Versus GST & CCE, Chennai North
Service Tax
2018 (5) TMI 887 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 9-5-2018
ST/42268 – 42270/2017 – Final Order No. 41457-41459/2018
Service Tax
Hon'ble Ms. Sulekha Beevi, Member ( Judicial ) And Hon'ble Shri Madhu Mohan Damodhar, Member ( Technical )
Shri G. Mani, Advocate, for the appellant
Shri B. Balamurugan, AC (AR) for the respondent
ORDER
Per Bench
The issue involved in all these appeals being the same, they are heard together and disposed by this common order.
2. The appellants namely M/s. Qube Cinema Technologies Pvt. Ltd. (formerly known as M/s. Real Image Media Technologies Pvt. Ltd.) are aggrieved by the confirmation of service tax under the heading 'Supply of Tangible Goods'. The appellants are engaged in supply, installation and operation of digital camera equipment having Qube digital technology to various theatre owners on 'right to use' basis through an agree
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same. Hence the appellants are now before the Tribunal.
3. On behalf of the appellants, the Ld. Counsel, Shri G. Mani appeared and argued the matter. He submitted that for the very same activity in the appellant's own case, the Tribunal vide Final Order No. 43368 – 43369/2017 dated 14.12.2017, has set aside the demand to hold that the activity is not subject to levy of service tax under the category of 'Supply of tangible goods' service. The activity subjected to levy of service tax in the said final order is prior to the periods involved in these appeals. That before July, 2012 the department had demanded the service tax under supply of tangible goods service. After July, 2012 the definition of service was newly introduced in Section 65 B (44). Section 65 B (51) provided that taxable service means any service on which service tax is liable under Section 66 N. The department has sought to levy service tax alleging that the activity falls under sub-clause (f) of Section 66 E – declare
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served in the above stated final order as under:-
“8.1 The issue that comes up for appellate decision is whether the activities of supply of equipment would fall within the ambit of supply of tangible goods or not. In the present case, the appellants contend that the transaction would not fall within the supply of tangible goods for the reason that the appellant has transferred possession as well as effective control of the equipment.
8.2 The definition of supply of tangible goods is as follows:-
“Taxable services 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 right of possession and the effective control of such machinery, equipment and appliances‟
From the above definition, when there is supply of use of equipment without transferring right of possession and effective control of the equipment, the same would fall within the
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goods, but it is the right to use property in goods; (ii) Article 366(29A)(d) read with the latter part of the clause (29A) which uses the words, “and such transfer, delivery or supply”, would show that the tax is not on the delivery of the goods used, but on the transfer of the right to use goods regardless of when or whether the goods are delivered for use subject to the condition that the goods should be in existence for use; (iii) in the transaction for the transfer of the right to use goods, delivery of goods is not a condition precedent, but the delivery of goods may be one of the elements of the transaction; (iv) the effective or general control does not mean always physical control and, even if the manner, method, modalities and the time of the use of goods is decided by the lessee or the customer, it would be under the effective or general control over the goods; and (v) the approvals, concessions, licences and permits in relation to goods would also be available to the user o
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being a deemed sale under clause 29 A of the article 366 of the Constitution. The sub-clause (f) of Section 66 E (declared services) refers to transfer of goods by way of hiring, leasing, licensing or in any such manner without transfer of right to use such goods. Whereas, in the present case the supply of goods involves transfer of right of possession and effective control on such goods and therefore would fall under the category of deemed sale. For better appreciation the relevant provisions of Section 65 (B) (44) after July 2012 is reproduced as under:-
“(44) “service” means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include-
(a) an activity which constitutes merely,-
(i) a transfer of title in goods or immovable property, by way of sale, gift or in any other manner; or
(ii) such transfer, delivery or supply of any goods which is deemed to be a sale within the meaning of clause (29A) of Article 366 of
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