JUDGMENT :

Dhananjaya Y. Chandrachud, J.

This appeal arises from a judgment and order of the Customs, Excise, & Service Tax Appellate Tribunal,¹["Tribunal"] West Zonal Bench at Ahmedabad in Service dated 5 April 2019. The Tribunal has, in exercise of its appellate jurisdiction, reversed the 30 March 2011 decision of the Commissioner of Service Tax, Ahmedabad ²["Adjudicating Authority"] and set aside the demand for payment of service tax on the charges collected by the respondent for supply of pipes and measuring equipment to its customers under Section 65(105)(zzzzj) of the Finance Act, 1994. This appeal rests on the interpretation and applicability of the provisions of Section 65(105)(zzzzj) of the Finance Act, 1994.

2. The respondent is in the business of distributing natural gas - Compressed Natural Gas³ ["CNG"] and Piped Natural Gas⁴ ["PNG"] - to industrial, commercial, and domestic consumers. Among other purposes, industrial consumers use PNG for manufacturing operations. Domestic and commercial consumers use PNG for cooking, power supply and air-conditioning. In order to facilitate the distribution of PNG to industrial, commercial and domestic consumers through pipes, the respondent installs an equipment described as 'SKID' at their customers' sites. The SKID equipment consists of isolation valves, filters, regulators and electronic meters. The equipment regulates the supply of PNG being distributed and records the quantity of PNG consumed by the customer, which is then used for billing purposes. The respondent enters into an agreement - the Gas Sales Agreement⁵["GSA"]- with consumers to whom gas is supplied by it.

3. The manufacture of CNG falls under Chapter Sub-Heading 27112900 of the Central Excise Tariff Act, 1985. The respondent is also engaged in providing the taxable service falling under the category of "transport of goods through pipeline", as defined in Section 65(105)(zzz) of the Finance Act, 1994. During the course of an audit by the officers of Central Excise, Ahmedabad-I during January 2009, it was noticed that the respondent had received income under the head of "gas connection charges" from its industrial, commercial, and domestic customers. From the GSA and the invoices, it was found that charges were collected for the "supply of pipes, measuring equipment etc." while providing new gas connections to customers. The ownership of the equipment is not with the customer but is retained by the respondent. The customer does not have control or any legal rights over the equipment. Value Added Tax was also not paid on these charges collected from the customers. A Notice to Show Cause⁶["Show Cause Notice"] was issued to the respondent on 13 October 2009 stating that the transactions undertaken by them are covered under the category of "supply of tangible goods service", under Section 65(105)(zzzzj) of Finance Act, 1994 which was introduced by Notification No.18/2008- ST. dated 10 May 2008, with effect from 16 May 2008. The Show Cause Notice required the respondent to pay service tax with effect from 16 May 2008 on the gas connection charges recovered for the period from 16 May 2008 to 31 March 2009. Three similar notices were issued to the respondent for subsequent periods. The first notice indicated that the respondent had received gas connection charges amounting to Rs. 23,37,51,903/- on which service tax and cess amounting to Rs. 2,83,46,411/-had not been deposited. The respondent was called upon to show cause why service tax should not be demanded together with interest and penalties under Sections 76, 77 and 78 of the Finance Act, 1994.

4. In their reply to the Show Cause Notice, the respondent stated that:

(i) PNG is distributed through pipes to industrial, commercial and domestic customers. The SKID equipment is installed at the customers' sites to regulate the supply of PNG distributed and record the quant