TaxTMI 
TaxTMI 
2017 (1) TMI 98
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....ity confirmed a total service tax demand of Rs. 22,27,21,183/- for the aforesaid mentioned period. Various penalties were also imposed on the appellant under the provisions of Section 76, 77 and 78 of the Finance Act, 1994. 2. Ld. Consultant appearing on behalf of the appellant submitted that the demands confirmed on lease rental charges are not legally tenable as the appellant is transferring the right to use the motor vehicles along with the effective control and possession. He submitted that the same should be considered as deemed sale in terms of Article 366 (29A) of the Constitution and subjected to VAT. The appellant already discharged VAT on the entire considerations received during the disputed period. Regarding the demand confirmed on the amount received towards fleet management fee , ld. Consultant submitted that the same is not for providing any service and as such, not liable to service tax. 3. Ld. Consultant further elaborated on the above two submissions referring to the various clauses of the agreement, it is submitted that the appellant has transferred all the substantial right along with the effective control and possession to use such vehicles to its clients....
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....e submissions made by the ld. Consultant. Referring to various clauses of agreement and also analysis made by the Original Authority regarding the legal scope of the agreement, it is submitted that the services rendered by the appellant are correctly subjected to tax under rent-a-cab service. Relying on the decision of the Hon ble Supreme Court in BSNL case (supra), ld. AR submitted that the criteria laid down by the Hon ble Supreme Court to determine whether or not the transaction will fall under the category of deemed sale has been examined elaborately by the Original Authority and the service tax liability has been confirmed only on proper finding after such application. 8. Ld. AR also referred to the Board s Circular dated 17.-8.2016 and 29.02.2008.He drew our attention to the case laws referred to by the Board in Circular dated 17.08.2016. Explaining further on the scope of the financial lease or operating lease, it is submitted that all these aspects have been examined in detail by the Original Authority before arriving at the conclusion. Ld. AR also referred to the certain decided cases. Reference is made to the same, wherever relevant, later in this order. 9. We have ....
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....ability under rent-a-cab service would arise. 11. We note that the decision of the Hon ble Supreme Court in BSNL case (supra) was elaborately discussed in the impugned order. The Five attributes to constitute a transaction for right to use of goods have been examined along with the Board s clarification dated 15.04.2013 by the Original Authority. The Original Authority found that the ingredients (c ) & (d) attributes laid down by the Hon ble Supreme Court were not fulfilled in the present case. The first one is relating to the transferee s right to use the goods, consequently all legal consequences of such use. The next point is that during the period of transfer, the transferee should have such legal right, it has to be the exclusion to the transferor. These points have been examined with reference to the terms of the agreement relevant to the case (pages 154 to 158 of impugned order). We note that relying on the decision of the Hon ble Punjab & Haryana High Court in the case of Aditya Cement 2009 (14) STR P&H , the Original Authority recorded that as the premium for insurance is paid by the appellant, they have effective control of the insured vehicles. Further, the appellants....
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....rtisements. The Hon ble High Court held that the service tax and VAT were mutually exclusive and the dominant object of transaction would determine the nature of transaction. We find that applying the said ratio and referring to the terms of the agreement, in the present case, the dominant object of the transaction is one of the renting /hire motor vehicles and not transfer of control or possession or deemed sale of such vehicle . We note that the similar such decisions relied upon by the appellant were all dealing with specific set of facts in terms of the agreement relevant to the respective cases. We note that the principle laid down by the Hon ble Supreme Court in BSNL (supra) will guide while determining the actual nature of transaction between the parties. We are satisfied that the impugned order examined the issue in correct perspective to arrive at the conclusion that the appellant are liable to service tax in respect of the services rendered by them under the category of rent-a-cab services . 14. The appellants contested the inclusion of "fleet management charges" in the taxable consideration. It is their case that for collecting such charges, no services were rendered ....
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....he appellant with reference to their bonafide belief. We note that in the present case, the dispute involved is liability of the appellant for service tax for providing vehicles on long term lease basis to various clients. Admittedly, there is a provision in VAT Law for taxing the deemed sale of motor vehicles in certain cases of long term lease arrangement. It is clear that the tax liability with reference to a particular transaction has to be decided based on the facts of transactions and the applicable tax law. The question whether the lease arrangement entered into by the appellant will be covered by VAT law or Service Tax had some element of dispute and ambiguity. The original order also examined the contract in detail and applied the various principles evolved in the case laws, more specifically the decision of the Hon ble Supreme Court in BSNL(supra) to decide that the activities of the appellant as falling under service tax domain. The appellant pleaded that they have discharged the VAT on these transactions during the relevant time. Considering these factual background, we find that the allegation of fraud, suppression and wilful misstatement cannot be sustained in the pre....