CESTAT held that lease agreements for fitouts constituted a...

CESTAT held that lease agreements for fitouts constituted a "deemed sale" under Article 366(29A) of the Constitution rather than a taxable service. The tribunal affirmed the Commissioner's findings that the goods were identifiable, available for delivery, and leased to the respondents for exclusive use. The Commissioner properly applied the Supreme Court's Bharat Sanchar Nigam Ltd test in determining that VAT had been correctly paid on these transactions. The tribunal rejected the Revenue's argument regarding dominant nature of the transaction, concluding that once a transaction qualifies as a deemed sale, service tax liability does not arise. The department's appeal was accordingly dismissed.