The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the order of the Commissioner quashing service tax demand under head supply of tangible goods for use ( SOTG ).
The issue involved in this appeal is whether the Commissioner has rightly dropped the demand under the head SOTG for the period July 2012 to March 2015.
The Revenue is in appeal before the Tribunal, on the ground that upon verification of the records – profit & loss account, ledgers, other records, it was noticed that Assessee have charged and received certain amounts as income, during the relevant period under the head “equipment hire charges”. It further appeared to Revenue that from 16.05.2008, the said receipt of hire charges is taxable to service tax under the head SOTG as introduced in Section 65(105)(zzzzj) of the Finance Act.
The advocate appearing for the respondent relies on the impugned order and further urges that in view of the ruling of BSNL as relied upon by the Revenue, there are no such pleadings or averments and further pointed out that Show Cause Notice is bereft of basic facts, and admittedly has not considered the agreement between the parties, vouchers, etc.
A Two-Member Bench comprising Anil Choudhary, Judicial Member and AK Jyotishi, Technical Member observed that “Having considered the rival contentions and the facts on records, we find that the Show Cause Notice is bereft of basic facts as required and clarified by the Supreme Court in BSNL case. We further find, there is no error in the order of the Commissioner, as there is no dispute on the facts in the impugned Order-in-Original. Further, Commissioner has rightly followed the Board Circular as aforementioned. In this view of the matter, we find no merit in the appeal of Revenue and thus the appeal is dismissed”.
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