MSPL LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, BELGAUM

JUDGEMENT

(1.) HEARD both sides. Applicant filed this application for waiver of pre -deposit of service tax of Rs. 1,74,93,845/ - along with interest and penalty. The demand is confirmed on the ground that applicant supplied tangible goods to the railways.

(2.) THE contention of the applicant is that applicant had given certain wagons under the scheme known as Own your wagon scheme on lease to the railways. The wagons in question becomes part of common pool of railways and is used by the railways for transport of goods and applicant has no control over the wagons given on lease. As per the agreement the applicant can avail the facility of getting some wagons on priority basis that too on payment of normal tariff. The contention of the applicant is that as the applicant has no effective control on the railways wagons, hence as per the definition of the taxable service they are not liable to pay any service tax.

(3.) THE learned JCDR submitted that as there is no transfer of absolute right to use by the applicant to the railways therefore, the applicants are liable to pay service tax under the category of supply of tangible goods. Hence the demand is rightly made.