TMI Blog2020 (11) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... RA PRADESH HIGH COURT ] , where it was held that such crate rentals would be liable to VAT/Sales tax on the ground that it amounted to deemed sale of crates inasmuch as there was transfer of right to use with effective control and possession of crates. It is trite that the transactions which are deemed sales cannot be liable to service tax. Also, it is seen from the order of the learned Adjudicating authority that he has not at all considered the submissions of the Appellant as regards payment of VAT on the said rentals. Further, when the aerated beverages are supplied by the Appellant to its customers, the possession as well as effective control of the said bottles along with crates in which they are supplied to keep them free from spil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ani Kumar, Member (Technical) For the Appellant (s) : Shri Ankit Kanodia, Chartered Accountant For the Respondent (s) : Shri S.Mukhopadhyay, Authorized Representative ORDER P.K.CHOUDHARY : The present appeal has been filed by the assessee being aggrieved with the Order-in-Original dated 28th March 2018 passed by the learned Commissioner, whereby the demand of service tax of ₹ 5,71,11,725/- has been confirmed for the period 2011-12 to 2014- 15, along with interest and penalty as proposed in the Show Cause Notice dated 14th August 2017. 2. Briefly stated, the facts of the case are that the appellant manufactures aerated water and sells the same in glass bottles of assorted sizes to its various customers su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng taken the view that the appellant is liable to pay VAT on the rental charges of bottles and crates. Whereas the appellant paid VAT @ 4%/5%, as applicable, the said authorities sought to demand tax @13.5%/14.5%. However, there is no dispute between the appellant and the sales tax authorities that such rental charges are liable to VAT as consideration for transfer of right to use the goods amounting to deemed sale thereof within the meaning of section 2(39)(c) of the 2003 act and Article 366(29A) of the Constitution of India. Tax on the sale or purchase of goods within the State is a subject which falls in the State List under the Seventh Schedule to the Constitution and it is beyond the competence of the Central Government to levy Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax. The appellant further contended that the said show cause cum demand notice was substantially barred by limitation. Department has raised demand of service tax under supply of tangible goods service as defined under Section 65(105) (zzzzj) of the Finance Act, 1994 as applicable to service tax.Hence, the present appeal before the Tribunal. 3. ShriAnkitKanodia, learned Chartered Accountant, appeared on behalf of the Appellant. He contended that the service tax demand on glass bottles and crate rentals is not sustainable for the following reasons: (i) crate rental has been collected by various bottling units across India while selling the beverages as a consideration towards transfer of right to use (deemed sale) and su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he period from 2011-12 to 2014-15 whereas the SCN was issued on 14th August 2017 much after the expiry of five years. He further submits that the spot memo was issued in 2014 whereas the SCN was issued in 2017 and thus the question of invoking extended period of limitation does not arise as the department was fully aware of the facts of the case of the Appellant and hence, no penalty is imposable. 4. The learnedAuthorized Representative appearing on behalf of the respondent department, agreed that the Committee of Chief Commissioners have accepted the order in case of other assessees. 5. Heard both sides and perused the appeal records. 6. In the instant case, it is seen that the Adjudicating Authority has confirmed service ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Adjudicating authority that he has not at all considered the submissions of the Appellant as regards payment of VAT on the said rentals. 6.1 Further, when the aerated beverages are supplied by the Appellant to its customers, the possession as well as effective control of the said bottles along with crates in which they are supplied to keep them free from spillage and breakage, is also passed by the Appellant assessee as the Appellant cannot govern the action of its customers as to how the customers would deal with such crates and bottles once supplied. 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 sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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