TaxTMI 
TaxTMI 
2023 (12) TMI 166
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....justified in holding that the transaction entered into by the Respondent with its customers with specific reference to the discernible and distinguishing contract clauses does not amount to "sale" under the Maharashtra Value Added Tax Act, 2002?" 3. The facts giving rise to the present Appeal are that: Respondent company is engaged in the supply of tangible goods and services and liable for service tax under the Finance Act and is also registered under the Act and the Central Sales Tax Act, 1956 (CST Act). It owns a fleet of 370 cranes of different capacities which are used for erection of industrial plans, refineries, petrochemical complexes, windmills, etc. Respondent lets out its cranes as per work order issued by its client to be deployed at the client's location with the help of skilled employees comprising of crane operators and riggers of Respondent. 4. In pursuance of a work order dated 1st April 2008, Respondent gave on hire and deployed few cranes to its client namely Suzlon Infrastructure Services Ltd. (SISL) on certain terms and conditions. It is the case of Respondent that on 3rd September 2013 the Investigation Officer of Appellant visited place of busi....
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....red payment or other valuable consideration;" ........................... shall be deemed to be sale. 6. The terms and conditions of the contract reads as thus: Work Order Contract riders(clauses) "1. If the deployed set of cranes of SML fail to meet SISL requirements mentioned in Clause No. 3 of Contract riders (clauses), then SISL is not liable to make any payments to SML and any advance / mobilisation charges paid to SML shall be refunded to SISL. 2. The hiring period shall be applicable from the date on which they are put into operation in totality at our site and is certified by our site in-charge. We shall not certify the set of subject cranes with any shortfall either by means of crane or accessories. In case of discontinuation / renewal, SISL shall inform two months in advance to SML. 3. The cranes shall work for the period from 9 am to 7 pm with one hour lunch break (minimum 260 hours per month). However, shift timings shall be mutually agreed by site incharge of SISL and SML. Any overtime shall be paid proportionately on pro-rata basis. 4. Regarding data of diesel consumption, filling up of the die....
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.... approval is given by SISL. 13. All required oil, maintenance and arrangements like accommodation, lunch, local conveyance (four wheeler), site advance for SML personnel like crane operators, helpers, maintenance men, etc. shall be arranged and borne by SML. 14. All tools, spanners, slings, slippers and maintenance items required for smooth functioning of the crane shall be arranged by SML. 15. SML shall provide suitable manpower so as to enable SISL to make use of cranes for completing 8-10 towers per month if 100% material is available. 16. As per our standard terms, since contract duration is for more than one year, de-mobilisation charges are not applicable. 17. Insurance of the crane operators/helpers and crane team members of SML shall be arranged & borne by SML. SML shall provide all necessary safety gear like safety shoes, safety helmet etc. for their personnel. Any safety, health & environment requirements implemented by SISL from time to time shall be binding on SML. 18. SML shall make Its own arrangement like watch and ward, etc. towards security of their equipment and SISL shall not accept any responsibility in this ....
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....ion of Respondent in hiring its cranes to its clients is not a transaction transferring the right to use and thereby not exigible to VAT and CST. He submitted that the question, whether a particular transaction is deemed to be a 'sale', depends on the facts of each case and there is no general proposition in that regard. Drawing our attention to the 'Notes to Vendor' appearing at the foot of the work order, Mr. Sonpal contends that the cranes were given to SISL upon 'delivery' and with a right to reject the cranes if not found to be as per specifications mentioned in the work order. He also refers to the contract riders specifying the period during which the cranes are to be deployed, the exclusive use to be made by SISL and the operators to work as per the instructions of SISL, etc. According to him this clearly indicates that the use of cranes is as per the control of SISL during fixed hours and as per the discretion of SISL. Remuneration for hire of crane is also fixed on an hourly basis. Mr. Sonpal further relies upon decisions of various High Courts including this Court and the Supreme Court to canvas his submission that possession is not a sine qua non for a transaction to be....
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.... (h) In the case of Deepak Nath V/s. ONGC (2010) 31 VST 337 (Gauhati)., the Court concluded that the mere fact that after the operation of the crane is over on any given day the crane may come back to the owner/contractor will hardly be material to decide as to who has dominion over the crane. Temporary physical possession of the contractor, the Court held, would be hardly relevant; (i) G.S. Lamba and Sons V/s. State of Andhra Pradesh (2011) 43 VST (AP). says to determine the nature of the transaction one has to consider the agreement and having considered the agreement between appellant and HPCL, there can be no doubt that there was a transfer of right to use; (j) The following facts emerge from the agreement between appellant and HPCL: (i) The tankers are identified by registration number and are attached to particular loading location. (ii) Tankers are in exclusive use of Company for transportation of petroleum products to customers and other loading stations. (iii) AHS is not entitled to use the tank truck contracted by oil company for any other product and would operate only for the oil company with whom the agreement is entered i....
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....ire charges starts only after the cranes are put into operation which clearly does not suggest handing over of possession. Merely giving a delivery address does not transfer effective control over the cranes to SISL. The delivery in law should have the intention of passing a right of the owner in the property to another person. (iii) The specified timing of work do not indicate transfer of right to use, but merely indicates the duration for which the cranes are to operate. (iv) Submission of fitness certificate and load chart of the cranes by Respondent certified by Government approved Agencies and the requirement of compliance by the operating crew of all statutory mandates like PUC, RTO, other licenses, etc. is to ensure the same to be instantly available for inspection by any authorities and does not indicate any transfer of the rights to use to SISL to the exclusion of Respondent. (v) Mobilization of cranes from one site to another as per requirements of SISL is itself the object of deployment, the same being setting up windmills at various sites which are at times more than 100 kms. apart. This does not remotely suggest that Respondent parted with th....
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....the contract conditions in General Cranes (supra). In General Cranes (supra), the terms of the contract were: (1) though the shift timing were predetermined, there was provision for working overtime and payment for the same on a pro rata basis; (2) breakdown of equipment was to entail pro rata deduction from payment; (3) hire charges were to commence only on the equipment being ready in all respects for operation on the site; (4) all papers statutorily required to operate cranes were to be kept with the cranes and copies thereof were to be submitted to the client; and (5) General Cranes was to supply requisite set of accessories, spares so as to meet the contingencies of breakdown and maintenance. 12. The Tribunal has compared the attributes of transfer of the right to use goods as discussed in General Cranes (supra) with those in the present matter, i.e., the clauses of the contracts in both matters. The Tribunal has observed that the clauses in both the cases are substantially similar. No clause in the contract in this case can be construed so as to conclude that there was intention to transfer the right to use the cranes in favour ....
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.... certificate and load chart of all cranes certified by Government approved Agencies was to be done by Respondent. (vi) Hiring charges were to be paid by SISL. (vii) Ownership was strictly to remain with Respondent and all tools, spanners, slings and other maintenance items required for smooth functioning of the cranes were to be arranged by Respondent. (viii) Watch and ward arrangement was the responsibility of Respondent. 15. All the clauses indicate that the effective control and possession have always remained with Respondent and what was being provided to SISL was only the deployment of the cranes on hire. The work order/contract clearly indicates the intention of parties that the custody and effective control of the cranes was to remain with Respondent. In these circumstances, it would be incorrect to contend that there was a transfer of right to use the cranes. 16. The judgments relied upon by Mr. Sonpal are of no assistance to him in as much as, as held in Rashtriya Ispat Nigam Limited (Supra) the effective control was with AHS. In Bramhaputra Vally Construction and Suppliers (Supra) also the Gauhati High Court has held that it is the feature....