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2014 (9) TMI 815 - AT - Service TaxSupply of Tangible Goods service - rental charges/hiring charges on the water meters installed in the places where water is supplied - appellant submitted that, the appellant is performing statutory function and within the meaning of statute, appellant has to be treated as State. What is collected by them is a statutory levy and he submits the charges collected by them are prescribed by the statute and therefore it cannot be liable to tax at all - Held that:- It is nobody’s case at present that there is an exemption notification applicable to water supply meters. In such a situation the Board circular would not be applicable. The fact of the matter is that requirements of statutory definition of supply of tangible goods are fulfilled in this case. In this case there is no dispute that the right of possession and effective control has not been transferred to the customer and are retained by the Board itself. - The meter installed in the premises where the water is supplied and so long as the water is being supplied, the meter would be there and the ownership of the meter and effective control would be with the Board only since officials of the Board take the meter reading at frequent intervals. Prima facie we find that hiring charges collected for water meters fulfilled the requirement of definition. The discussion above would show that appellant has not been able to make a prima facie case at this stage. However as regards extended period, it requires a detailed consideration of statutory provisions, entitlement of the appellant to entertain a bona fide belief and applicability of circular etc. which can be done only at the time of final hearing. At this stage we consider that in the absence of prima facie case on merits, the appellant should be required to deposit at least the amount attributable to the normal period of limitation. - Partial stay granted.
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