TaxTMI 
TaxTMI 
TaxTMI 
2024 (1) TMI 182
X X X X Extracts X X X X
X X X X Extracts X X X X
....hri Kiran Chava, Advocate appearing on behalf of the appellant at the outset submits that in the appellant's own case the with reference to the identical contract this Tribunal has already considered the case and it was held that the renting of Earth Moving Equipment to various clients does not fall under the category of 'supply of tangible goods for use' services on the ground that the right to possession and effective control of such equipment were transferred to the lessee and the same being a deemed sale in terms of Article 366 (29A) of Constitution of India. The transaction is of deemed sale and the appellant have admittedly paid the VAT. Therefore, the impugned order is not sustainable. He placed reliance on the following judgments: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... control of such machinery, equipment and appliances." While the assessee contends that what they have transferred is right to use which is a deemed sale, the Revenue's contention is that the right of possession and effective control remained with the assessee and hence, the transaction has to be treated as service. 5.2 Revenue's contention is based on the clauses in the agreement relating to restrictions of use by the lessee, provision of skilled operator by the lessor and maintenance and repairs of the equipment by the lessor. Merely because restrictions are placed on the lessee, it can not be said that there is no right to use by the lessee. Such a view of the revenue does not appear to be tenable when we read carefully the provision....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ich is a deemed sale under Section 2(24) of the Maharashtra Value Added Tax Act, 2002. The Finance Minister's speech and the budget instructions issued by the C.B.E. & C. also clarify that if VAT is payable on the transaction, then service tax levy is not attracted. 5.3 A similar issue arose for consideration before the Hon'ble High Court of Andhra Pradesh in the G.S. Lamba case cited supra. The petitioners therein entered into a contract with M/s. Grasim, manufacturer of ready mix concrete (RMC) for providing transportation service for shipping RMC by hiring specially designed Transit Mixers. Under the contracts, the transit mixers are never transferred and effective control over running and using of these vehicles, as well as disciplina....
X X X X Extracts X X X X
X X X X Extracts X X X X
....its in relation to goods would also be available to user of the goods, even if such licences or permits are in the name of transferor of the goods; and (6) during the period of contract exclusive right to use goods along with permits, licences, etc., vests with the lessee. Applying these principles and examining the terms of the contract, the Hon'ble High Court held that the transaction involved was a transfer of right to use Transit Mixers and not transport service and the petitioners had transferred the 'right to use goods' to Grasim. If we apply the ratio of the above decision to the facts of the present case, the transaction involved herein is "transfer of right to use" which is a deemed sale and not "supply of tangible goods for us....