TMI Blog2019 (9) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... he supply of tangible goods, namely the equipment is for the use of the customer. The terms of the agreement leave no manner of doubt that the purpose of the equipment is to measure the amount of gas supplied to the customer for the purpose of billing. They are, therefore, for the use of the appellant and are not for use by the customers. The finding to the contrary recorded by the Adjudicating Authority is, therefore, not correct. The Adjudicating Authority was, therefore, not justified in confirming the demand of duty on the collection charges under the taxable service- Supply of Tangible Goods - In this view of the matter, it may not be necessary to examine as to whether the appellant refunds the collection charges to the customers on termination of the gas connection. Demand set aside - decided in favor of assessee. - Service Tax Appeal No. 421 of 2011, 422 of 2011, 598 of 2012, 13196 of 2013, 388 of 2011, 390 of 2011 - A/10909-10914/2019 - Dated:- 5-4-2019 - HON BLE MR. JUSTICE DILIP GUPTA, PRESIDENT AND HON BLE MR. C.J. MATHEW, MEMBER (TECHNICAL) Shri J.C. Patel, Advocate for the Appellants Shri T.G. Rathod, Joint Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gas in the form of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) to customers. PNG is sold to Industrial, Commercial and Domestic customers and while the Industrial customers use PNG for running of their manufacturing operations, the Domestic and Commercial customers use PNG for cooking, power supply and AC systems. It was also stated that the PNG is distributed through pipes to Industrial, Commercial and Domestic customers and equipments called SKID are also installed at the customers site to regulate the supply of PNG distributed and to record the quantity of PNG consumed by customers for billing purposes. It is only thereafter that an agreement is entered with the Customers. The SKID consists of isolation valves, filters, regulators and electronic meters. 6. The appellant also pointed out from the relevant clauses of the agreement that the equipment was installed at the customer s place without transferring the ownership and possession and that the appellant retained the right to use the equipment. It was further stated that the arrangement between the appellant and the customers was to provide any service but only to supply of gas and for the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arly indicates that, effective control of the Measurement Equipment rests with the said noticee which satisfies another essential ingredient of the taxable service of Supply of Tangible Goods defined under Section 65(105) (zzzzj) of the Finance Act, 1994. Another essential ingredient of the said definition is that the supply of goods must be for use by the recipient. I find that the purpose of measurement Equipment is effective and accurate billing. As discussed above, the buyer and not the seller pays for the supply, installation and maintenance of Measurement Equipment because the use is meant for each recipient. The fact being that the technical expertise to monitor, handle and record the readings available with the seller is no reason to believe that the use of the Measurement Equipment is by the said noticee and not by the customer. Therefore I find that the actual use of the Measurement Equipment is by each customer i.e. the service recipient. The expression use does not mean that the recipient has to personally and physically use the equipment all the time. It broadly refers to the direct or indirect use whether personally or through anybody else and meant to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact the equipment was for use of the appellant. In support of his submission learned counsel placed reliance upon a Division Bench judgment of the Mumbai Bench in Meru Cab Pvt. Ltd. V/s Commissioner of Central Excise, Mumbai reported in 2016 (41) STR (444) (Tri-Mum.). 12. Shri T.G. Rathod, learned Authorized Representative of the Department has, however, supported the impugned order and has submitted that the appellant did provide tangible goods service to the customers since the pipe and the equipment were for the use of the customers who became the service recipient. In support of his submission, learned Authorized Representative has placed reliance upon an interim order dated 10 December, 2013 passed by Bangalore Tribunal in Bangalore Water Supply and Sewerage Board V/s CCE, CSTAT Bangalore-I reported in 2014 (34) STR 878 (Tri-Bang.) as also the interim order dated 6 March, 2012 passed in this Appeal on the application filed by the appellant for waiver of pre-deposit. 13. We have considered the submissions advanced by the learned counsel for the appellants as also the learned Authorized Representative of the Department. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s supplied to the customer for the purpose of billing. They are, therefore, for the use of the appellant and are not for use by the customers. The finding to the contrary recorded by the Adjudicating Authority is, therefore, not correct. 17. The view so taken finds support from the decision of the Tribunal in Meru Cab Co. Pvt. Limited. The dispute that arose was as to whether by providing taxi to an individual driver for use, the appellant had rendered any service which could be considered as Supply of Tangible Goods . The Division Bench of the Tribunal, after perusing the agreement found that though the driver was in possession of the vehicle but the agreement did not indicate that the driver was having possession of the vehicle for his use which was the most important aspect to be covered under the category of Supply of Tangible Goods . The relevant portion of the order is reproduced below:- 11. The adjudicating authority has based his entire findings hold against the appellant by relying upon the various clauses of the agreement/contract entered by the appellant and individual driver and more specifically on the terms of the phrases for use ..... X X X X Extracts X X X X X X X X Extracts X X X X
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