TaxTMI 
TaxTMI 
TaxTMI 
2022 (12) TMI 1440
X X X X Extracts X X X X
X X X X Extracts X X X X
....13,71,97,241/- along with interest and Penalty ST/11162/ 2017 F.No. STC/4-24/O&A/2014-15 dated 23.09.2014 AHMSVTAX000-COM006-16-17 dated 20.12.2016 July 2012 to March 2014 Service tax demand of Rs.5,12,47,905/- along with interest and penalty ST/10643/2020 F.No. STC/4-19/O&A/16-17 dated 08.03.2017 AHMEXCUS002-COMMR09-10/2020-21 dated. 30.06.2020 April 2015 to March 2016 Service tax demand of Rs.2,10,20,116/- along with interest and penalty 1.2 Briefly the facts of the present cases are that the appellant is engaged in providing of services classified under the category of Management, Maintenance or Repair Service, Erection, Commissioning or Installation Service, Manpower Recruitment or Supply Agency‟s Services etc. and is registered under the Service Tax. During the course of Audit, it was observed by the department that Appellant had leased out Power Generating and Heat Recovery Equipments to various parties under various Lease Agreements. For the same, Appellant charged rent termed as "Lease Charges‟ under the head - Standby Charges and Variable Charges, for which lessee Parties pay an advance and Bank Guarantee to the Appellant. For that the VAT was collec....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under this Act and where the goods are transferred by a person to other for their right to use to goods for a period, the same shall be liable for payment of VAT at the rates specified in the Schedules. Since the Appellant have leased the goods /equipments to customers for their use, the same is subjected to the provisions of the Gujarat Vat Act, 2003 and Appellant are not liable to pay Service tax on the right to use to goods. 2.1 He also submits that appellant are the owner of the gas genset/ plant. The Appellant have leased the plant to their Customers for their use for the purpose of manufacture of their final products, and collected rent from the Customers as standby charge and variable charge basis under the agreement. Once the plant / goods are transferred by the Appellant to their customers for their use, the rights to use as existing with the Appellant terminate when the plant/ goods are transferred and vest with customers. The customers have to provide (i) fuel (ii) jacket water & feed water (iii) the site and (iv) other facilities, and the entire control of the plant therefore vests with the customers and not with the Appellant. Further, the customers will also indemni....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions of GVAT Act and CST shall not be treated as Service. 2.3 In support of above views, he placed reliance on the following judgments: (i) Rashtriya Ispat Nigam Ltd. Vs. Commercial Tax Officer -1989 (12) TMI 325-Andhra Pradesh High Court (ii) State of Andhra Pradesh Vs. Rashtriya Ispat Nigam Ltd. - 2002 (3) TMI 705 - Supreme Court. (iii) G.S. Lamba & Sons, Vs. State of Andhra Pradesh - 2015 (324) ELT 316 (AP) (iv) CST Vs. UFO Movies India Ltd. - 2022 -VIL-07-SC-ST (v) CST Vs. UFO Moviez India Ltd, - 2021-VIL-11-SC-ST (vi) UFO Moviez India Ltd. Vs. CST - 2017-VIL-774-CESTAT-ST (vii) Subhash Light House Vs. CGST - 2022-VIL-106-CESTAT-ST (viii) Express Engineers & Spares Pvt. Ltd. Vs. CGST - 2022 (1) TMI564-CESTAT- ALLAHABAD (ix) You Broadband & Cable India Ltd. Vs. CCE 2020(2) TMI 187- CESTAT Ahmedabad (x) GE Power Services India Pvt. Ltd. Vs. PCCST 2021(2)TMI 83- CESTAT (xi) Computation Software Ltd. Vs. CST - 2019(25)GSTL 75 (T) (xii) GIMMCO Ltd. Vs. CCE 2017(48)STR 476 (T) (xiii) Lindstrom Service India Pvt. Ltd. Vs. CCE- 2020 (33) GSTL 391 (T) (xiv) Century Pulp and Paper Vs. CCE - 2019 (29) GSTL 42 (T) (xv) CCE Vs. Brindavan Bottlers Ltd. - 2019 (....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f hiring, leasing, licensing or any such manner without transfer of right to use such goods, were liable to service tax. 4.2 To fall within the definition of taxable service, fallowing three conditions are required to be satisfied - (1) there should be a supply or transfer of goods for use; (2) The transfer must be by way of hire or lease or licences for using the goods; and (3) The right of possession and effective control of such goods must not have passed on to the transferee. Once these above three conditions are satisfied, the provisions of the said entry will be attracted. 4.3 We find that in the present matter there is no dispute related to the above first two conditions. The disputes, centres around the third conditions, that whether the transaction between the Appellant and its customers would involve the transfer of right of possession and effective control or a transfer of right to use. To examine this issue, it would be appropriate to refer to the agreement entered into between the appellant and its customers. As noted, the appellant supplies Power Generating Equipments / gas genset (Plant) to Customers on standby charges and variable charges basis under the agree....
X X X X Extracts X X X X
X X X X Extracts X X X X
....alia observes as under :- "90. The entire infrastructure/instruments/appliances and exchange are in the physical control and possession of the petitioner at all times and there is neither any physical transfer of such goods nor any transfer of right to use such equipment or apparatuses. 91. To constitute a transaction for the transfer of the right to use the goods the transaction must have the following attributes: a. There must be goods available for delivery; b. There must be a consensus ad idem as to the identity of the goods; c. The transferee should have a legal right to use the goods -consequently all legal consequences of such use including any permissions or licenses required therefor should be available to the transferee; d. For the period during which the transferee has such legal right, it has to be the exclusion to the transferor this is the necessary concomitant of the plain language 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 rights to others." 4.5 In th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ection of the said Act also provides levy of tax on the transfer of the right to use any goods. Article366(29A)(d) inserted by the Constitution (46th Amendment) Act, 1982 on 2-2-1983 also reads as under : "366. (29) "tax on income" includes a tax in the nature of an excess profits tax; (29A) "tax on the sale or purchase of goods" includes - (a) a tax on the transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration; (b) a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract; (c) a tax on the delivery of goods on hire purchase or any system of payment by instalments; (d) a tax on the 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; (e) a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; (f) a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being f....