TMI Blog2019 (2) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... A of Article 366 of the Constitution of India shall not amount to be a service. Since appellant was using railways for most of the clearances of its final product i.e. cement and clinker, the appellant opted for the said scheme introduced by Railway in the year 1992 i.e. “Own Your Wagon Scheme”. In accordance of the scheme, irrespective the ownership of wagons could vest in the producers, but wagons were to be placed at the disposal of Railways. Not only this, those were to be merged in general pool of Railways. Also responsibility of day-to-day operation and maintenance would be that of Railways - not only the right of possession but the effective control upon railway wagons was meant to be transferred from the appellant to the Railways ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices for making payment of Central Excise duty on the clearances of their final product. During the course of audit of appellants record for the period February, 2013 to December, 2013, the Department observed that the appellant have leased their wagons to Indian Railways on rental basis. But no Service Tax liability has been discharged on the amount so received by the appellant. Despite that the service rendered by the appellant falls under the category of supply of tangible goods service. Resultantly, a show cause notice No.925 dated 09.07.2015 was served upon the appellant proposing the recovery of Service Tax of ₹ 10,04,879/- for rendering the aforesaid service for the period 2010-11 to 2014-15. The interest at prescribed rate o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tainable. Order is prayed to be set aside. The appeal is prayed to be allowed. 5. Per-contra, ld. D.R. has justified the order under challenge. Emphasis is laid on the findings as mentioned in para 8 thereof, wherein the transaction in hand is denied to be a deemed sale for the fact that no VAT has been paid in the impugned transaction. Appeal is accordingly, prayed to be dismissed. 6. After hearing both the parties and perusing the entire record, we foremost, reproduce the definition of supply of tangible goods service as defined under Section 65 (105) zzzzj of Finance Act, 1994 as follows:- On 16.05.2008, sub-clause (zzzzj) of Section 65 (105) was introduced, which reads as under:- (105) taxable service provided or to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of the present case, since appellant was using railways for most of the clearances of its final product i.e. cement and clinker, the appellant opted for the said scheme introduced by Railway in the year 1992 i.e. Own Your Wagon Scheme . In accordance of the scheme, irrespective the ownership of wagons could vest in the producers, but wagons were to be placed at the disposal of Railways. Not only this, those were to be merged in general pool of Railways. Also responsibility of day-to-day operation and maintenance would be that of Railways. Based on the said scheme, appellant entered into an agreement with the Railways on 22nd February, 1999 in respect of 125 wagons, which were to be leased to Railways for a period of 20 years. Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... occurs on the entering into the agreement followed by delivery of the tankers and not on day-to-day basis as contended by the Revenue. The stipulation as to payment of daily hire charges is only a commercial term relating to computation of the hire charges payable by the assessee to the owners. These clauses do not legitimize the inference that supply occurs on each day the tankers are used. The Supreme Court in 20th Century Finance Corporation and Anr. (supra) clarifies that where goods are available, the transfer of the right to use takes place when the contract in respect thereof is executed; since the contract is executed, the right is vested in the lessee; and the situs of the taxable event of such tax (Sales Tax or VAT, as the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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