TaxTMI 
TaxTMI 
2022 (2) TMI 141
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....cts of the case are that the appellants are registered under the State Sales Tax/ VAT law as well as under the Service Tax provisions. They are engaged in business of supply of generator sets on rental basis to their clients. The supply was in the following manner: (a) Fixed gensets- In this case the appellant fixed or installed the gen sets in the premises of the clients, and possession of such gen sets lies with the clients. In certain cases the appellant also provided operator to run the gensets who worked as per the instructions of the clients; (b) Mobile gensets- In this case the clients require gensets for some specific events, or where clients required transportable/mobile gensets for short-term period. The appellan....
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....ht to use. Accordingly, it was held by the Ld. Commissioner that the appellant was entitled to deduction of turnover corresponding to such contracts, and the consideration against such contracts was not includible in the service tax liability on the assessee, as in such cases the transaction was that of deemed sale. 7. However, the Ld. Commissioner has not considered the supply of mobile/ transportable gensets as deemed sale, and confirmed the service tax liability against such contracts or transactions on the ground that in most of the cases the appellant had provided gensets along with operator, who operated and carried out the repair/maintenances and under such supply, the effective possession and control of the machine was with the a....
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....ther, w.e.f. 01.07.2012 in the negative list regime, the transfer of goods, by way of hiring, leasing, licensing or in any such manner without transfer of right to use such goods constituted the declared service, in terms of clause (f) of section 66E of the Finance Act, 1994. In view of both (before 01.07.2012 and after) the above definitions, supply of tangible goods or transfer of goods without transferring the right of possession or by way of hiring, leasing, licensing or in any such manner without transfer of right to use such goods, were liable to service tax. 10. The Ld. SDR appearing on behalf of the revenue has strongly supported the impugned order passed by the Ld. Commissioner, and pleaded that the demand of service tax has ....
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....sion cannot be covered under declared service as provided under Section 66E(f) of the Act. Further, the said activity has also been excluded from the definition of 'service' as defined under Section 65B(44) of the Act. Hence, service tax demand for the said period is also not sustainable and is liable to be set aside. That the appellant is paying VAT on the amount received from clients for supply of D.G. sets. Thus, imposition of service tax on the same transaction is contrary to law as it is a settled law that VAT and service tax are mutually exclusive. Therefore, on a particularly transaction either VAT or service tax can be levied. 11.4 That in the impugned order while confirming the service tax demand on the higher charges, ld. Adjud....
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....sis supplied) 14. In view of the Article 366(29A)(d) of the Constitution, transfer of the right to use any goods for any purpose, whether or not for a specified period, for cash, deferred payment or other valuable consideration, has to be considered as deemed sale or purchase of goods. 15. In the instant case it is observed that the appellant have supplied the mobile gensets to his clients for short periods along with technicians and fuel. It is the requirement of the client to use such gensets when there is no electricity or the electricity goes off or as desired by client, and the gensets are put to use to keep or ensure uninterrupted supply of electricity at the clients place/site. 15.1 Thus, the use of the gensets is purely on ....
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....ge of the statute - viz. a "transfer of the right" to use and not merely a licence to use the goods; e. Having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same right to others. 17. We find that all the above five criteria mentioned by the Apex Court in the said judgment are fulfilled, in favour of the appellant in the instant case. It is seen that the gensets are available for delivery to the clients; the gensets are supplied as per the agreement between the appellant and the clients; the clients have legal right to use such gensets as agreed upon between the appellant and the clients; and the appellant i.e. the owner cannot transfer the gensets ....