https://www.taxtmi.com/caselaws?id=469346 Lease of machineries and transformers was examined to determine whether it was taxable as supply of tangible goods under the Finance Act, 1994, or a transfer of the right to use goods outside service tax. The decisive test was whether possession and effective control remained with the supplier; on the stated facts, the customer had possession and free use during the lease period, while the supplier retained no effective control. The transaction was also treated as a sale for VAT purposes. Applying that principle, the arrangement was held to be a transfer of the right to use goods, not a taxable service, and the service tax demand and penalty were not sustainable. en-us Fri, 18 Jul 2025 00:00:00 +0530 Mon, 15 Jun 2026 23:25:09 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=469346 Lease of machineries and transformers was examined to determine whether it was taxable as supply of tangible goods under the Finance Act, 1994, or a transfer of the right to use goods outside service tax. The decisive test was whether possession and effective control remained with the supplier; on the stated facts, the customer had possession and free use during the lease period, while the supplier retained no effective control. The transaction was also treated as a sale for VAT purposes. Applying that principle, the arrangement was held to be a transfer of the right to use goods, not a taxable service, and the service tax demand and penalty were not sustainable. Case-Laws Service Tax Fri, 18 Jul 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=469346