TMI Blog2022 (1) TMI 1336X X X X Extracts X X X X X X X X Extracts X X X X ..... lp to the Revenue. Appeal of assessee allowed. - Service Tax Appeal No. 10718 of 2021 AND Service Tax Appeal No. 11134 of 2019 - A/10091-10092/2023 - Dated:- 23-1-2023 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL), Ms Vandana Singh (Advocate) appeared for the Appellant Shri Tara Prakash, Assistant Commissioner(AR) for the Respondent ORDER The brief facts of the case are that the appellant is a subsidiary of Lindstrom OY Finland and is engaged in leasing workwear (uniform) to their clients on the conditions mentioned in the agreements with their clients. The salient features of the agreement are as under: (i) That the Assessee undertook to deliver, wash and service individually customised workwear to the clients. Each worker will be provided with the workwear of his size which will be measured by the Assessee along with logo and labels as specified. (ii) The Assessee would own the workwear and will have exclusive right to wash and service the same. (iii) If the delivery is delayed or defective, the same shall be compensated by Lindstrom. (iv) The workwear shall be collected by the customer once a week ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating authority has dropped the demand vide Order-in-Original No. VAD-EXCUS-001-COM-2918-19 dated 18.03.2019 against which the Revenue has filed appeal bearing No. ST/11134/2019. Since both the appeals involving a common issue, they are taken up for disposal together. 2. Ms. Vandana Singh, learned Counsel appearing on behalf of the assessee, at the outset submits that the similar issue arose out of the identical service agreement with various service recipient at Chandigarh and Chennai Bench, which was decided in favour of the assessee at the following order: Service Tax Appeal No. 99 of 2016 vide final order No. 60716 of 2019 dated 02.08.2019. [CESTAT Chandigarh] Service Tax Appeal No. 40498 of 2017 vide final order No. 40818 of 2020 dated 29.10.2020. [CESTAT Chennai] Service Tax Appeal No. 41249 of 2019 vide final order No. 42148 of 2021 dated 25.08.2021. [CESTAT Chennai] She submits that with the above Tribunal orders as of now, the issue stand decided in favour of the assessee. Following the same, these appeals also deserve to be decided in favour of the assessee. 3. On the other hand, Shri Tara Prakash, learned (Assistant Commissioner) Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia Pvt. Ltd. the work-wear and Lindstrom engaged in delivering, washing and servicing the work-wear and taking care of the required replacement of the work-wear in accordance with their purpose of use. Lindstrom owns the leased products and shall have the exclusive right to wash and service them. ............ ............ Servicing Packing and transportation of the work-wears: Lindstrom shall place the packing and transport equipment needed for the deliveries at the disposal of the customer and the customer shall use the equipment only for such as purpose. Work-wear to a named collection point in accordance with the schedule agreed; Lindstrom shall collect the work-wears for servicing once a weak. The work-wears shall be inspected and repaired in connection with their servicing; In case of any nonconformance with the agreed quality after the servicing of the work-wear, Lindstrom shall replace the work-wear. Measurement changes, logos and name tags: Measurement changes and other changes shall be separately agreed upon. The work-wear can under a separate agreement be provided with logos and name tags. The sewing work of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a consumer of such services. On the contrary, the transaction is a transaction of rendition of service. 24. It is the contention of the Ld. Advocate that simply retaining the right to wash and maintain work-wear for the clients would not make it as if the effective control on these goods has been retained by the appellant. We are in agreement with the contention made by Ld. Advocate as the same as got approval from Hon‟ble Supreme Court in BSNL case(supra). We also find that the similar issue come up for consideration before this Hon‟ble Tribunal in case of Gimmco Limited vs. Commissioner of Central Excise and Service Tax, Nagpur [2017 (48) STR 476 (Tri.- Mum). The issue involved in that case was regarding the renting of earth moving equipments to various Customers by the M/s Gimmco Limited and based on the clauses in the agreement, there was restriction of use by the lessee as skilled workers to operate the equipment was being provided by the lessor and maintenance and repair of the equipments were also by the lessor in para 5.1, 5.3, 5.4 and 5.6 of the order it has been held that there is no service involved in this case relying on yet another decision of Hon& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lts in terminating rights and other relations in one entity and creating them in another. While construing the word transfer due regard must be had to the thing to be transferred. A transfer of the right to use the goods necessarily involves delivery of possession by the transferor to the transferee. Delivery of possession of a thing must be distinguished from its custody. It is not uncommon to find the transferee of goods in possession while transferor is having custody. When a taxi cab is hired under rent-a-car scheme, and a cab is provided, usually driver accompanies the cab; there the driver will have the custody of the car though the hirer will have the possession and effective control of the cab. This may be construed with the case when a taxi car is hired for going from one place to another. There the driver will have both the custody as well as possession; what is provided is service on hire. In the former case, there was effective control of the hirer (transferee) on the cab whereas in the latter case it is lacking. We may have many examples to indicate this differences. If we equate the observations of the Court and the activities of the noticee, it would be seen tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh, inspect and repair and finish them industrially. e. In case of termination of the contract, customers / clients shall redeem from the assesse, the work wear that have been in the use. f. In all circumstances like cancellation of agreement, the work wear remains the property of LSIP. 7. The Chandigarh Bench of the Tribunal had occasion to analyse very same issue and terms and conditions of similar agreement entered into by the appellant with clients. After analysis of the transaction as seen from the agreements, the Tribunal held as under:- 26. Accordingly, we find that in the instant case, in terms of agreement work-wear rented out always remains with the exclusive possession of their clients and nobody else can use those work wear at the same time and hence effective control to lie with the user / clients. The appellant, therefore, does not have control over the use of the work-wear. Thus the activity is not in the nature of service‟ under the Finance Act in both during the period prior to negative list regime and thereafter as held in the impugned order. The order under challenge is therefore not sustainable 8. Further, the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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