SBEC SUGAR LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE adjudication order dated 27 -9 -2012 by the Additional Commissioner, Customs -I, Meerut, confirmed Service Tax demand of Rs. 7,24,173/ - besides interest and penalties as stipulated, for the petitioner having provided the taxable supply of tangible goods service defined under Section 65(105)(zzzzj) of the Finance Act, 1994. The transaction in issue was the lease of a boiler owned by the petitioner to M/s. Modi Sugar Mills, Modi Nagar, Ghaziabad under a lease Agreement dated 8 -6 -2007. The taxable value considered was the rent received by the petitioner from Modi Sugar Mills, during the period April, 2010 to March, 2011. On a consideration of the several clauses of the lease agreement, which clearly indicate transfer of possession and effective control over the leased goods (boiler) by the lessee from the petitioner lessor, the adjudicating authority nevertheless concluded; and in our prima facie view erroneously, that the taxable STGU service was provided by the petitioner. The relevant statutory provision clearly excludes transfer of the right to use tangible goods involving transfer of possession and effective control, from the scope of the taxable service. The petitioner unsuccessfully preferred an appeal which was rejected by the Commissioner (Appeals), Meerut -I.

(2.) ON a prima facie analysis, the transaction appears to be clearly outside the purview of STGU. We therefore grant waiver in full of pre -deposit and stay all further proceedings for realisation of the adjudicated liability, pending disposal of the appeal. Stay application is accordingly disposed of. The appeal be listed for hearing in the usual course.