TaxTMI 
TaxTMI 
2024 (10) TMI 54
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....,93,120/- and therefore a show cause notice dated 07.10.2013 came to be issued which was adjudicated by the impugned order-in-original dated 21.08.2014 whereunder service tax amounting to Rs. 1,67,93,120/- has been confirmed under Section 73(1) of Finance Act, 1994 and equal amount of penalty has also been imposed under Section 78 of the Finance Act, 1994. Interest on the demanded service tax has also been confirmed. The show cause notices for demanding service tax for the subsequent periods were also issued and confirmed by the Adjudicating Authority and the appellant has reached to this Tribunal and therefore the same are being taken together as stated in initial of this paragraph. 2. The basic contention of the department for demanding service under the category of Supply of Tangible Goods service is that while providing Diesel Generator Sets on lease basis, the appellant has not transferred the right of possession and effective control on the Diesel Generator Sets and therefore, the appellant should have paid the service tax under the category of Supply of Tangible Goods service. 3. Shri Hardik Modh, learned Counsel appearing for the appellant has contended that appellant....
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.... per the scheme, the assessee shall be availing refund on input tax paid on purchase of input within Gujarat State and; (ii) The appellant shall be allowed remittance of VAT with respect to sale of goods. 3.1 The learned advocate has also relied upon the CBEC Circular No. 334/1/2008-TRU dated 29.02.2008 which has clarified that service tax is not liable to be paid, if VAT has been paid on the transactions. The learned advocate has produced the relevant text of the CBEC Circular dated 29.02.2008 which reads as under:- "4.4.3 Proposal is to levy service tax on such services provided in relation to supply of tangible goods, Including machinery, equipment and appliances, for use, with no legal right of possession or effective control. Supply of tangible goods for use and leviable to VAT / sales tax as deemed sale of goods, is not covered under the scope of the proposed service. Whether a transaction involves transfer of possession and control is a question of facts and is to be decided based on the terms of the contract and other material facts. This could be ascertainable from the fact whether or not VAT is payable or paid." 3.2 The learned advocate has also ar....
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.... have the right of possession and effective control on the Diesel Generator Sets which is evidenced by the agreement which have been shown to us by the learned advocate. We find that the identical issue has been considered and settled by this Tribunal in various decisions. This Tribunal in the case of Technical Dying Service Pvt. Limited vs. CCE&ST, Vadodara-ii reported at 2024 (1) TMI 453- CESTAT Ahmedabad has held as follows:- "4. We have carefully considered the submission made by both sides and perused the records. We find that as per the undisputed fact of the case that the appellants have given their dehumidifier equipment and also erected, installed and commissioned at the service recipient's factory. As per the module one which is under dispute in the present case the appellants have erected & installed the de-humidifier and thereafter the complete possession and control of the machine was given to the customer during the entire renting period. Thus, the possession and effective control was transferred to their customers during the entire renting period. The activity can be classified under supply of tangible goods for use service under Section 65 (105) (zzzzj) of ....
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....receive the digital content and exhibit cinema require Digital Cinema Equipments which are either owned by them or are taken on lease by them. The appellant has leased such equipments to some of the theaters. The appellant in order to fulfil contract with the distributors are inserting smart cards to monitor the number of shows in such DCE. They are also collecting registration fee from theaters for conducting feasibility study which is reimbursement of expenses. The demand against them is on lease of DCE equipments given to the theatre owners on the ground that since the effective control and possession of such equipments has remained with the appellant, hence the services are of "supply of tangible goods for use". We find that the adjudicating authority has held that since as per contract the equipment will remain sole property of equipment provider and he shall bear the cost of normal wear and tear and repairs it is clear that the legal right and effective controls rests with the appellant. We find that except the above findings the Commissioner has not dwelled upon any of the submission and facts made by the appellant. The terms and condition of the agreement are its essence an....
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.... on behalf of appellant or has no bearing on the agreement between the theatre owner and appellant in case of leasing of DCE Equipments. As far as insurance of the DCE equipment is concerned the Appellant were owners of the equipments and the nature of leasing agreement does not change for the reason that the insurance was done by the appellant. For bringing any service under the category of "supply of tangible goods service" in terms of Section 65(105)(zzzj) it is imperative to see that such service is in respect of services towards supply of tangible goods for use "without transferring right of possession and effective control". In the present case once the DCE were transferred to theatre owner the appellant had no control over running of such equipments which are to be operated by the persons employed/deputed by the theatre owner. The theatre owner had contractual control over such equipments which was in their possession. All these factors are to be taken into consideration while determining the nature of service. It is observed that the appellant has been paying VAT on such leasing of DCE since year' 2006. Further the fact remains that in 2008 they approached the authority for....
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....learly states that VAT and Service Tax are mutually exclusive. Considering all above factors it appears there is no suppression of fact on appellant's part. It is also observed that the appellant obtained DDQ (Determination of Disputed Question) dated 26-6-2008 from Commissioner of Sales Tax, who held that lease rental is liable for VAT. The appellant accordingly was discharging the VAT liability even before the taxability on 'Supply of Tangible goods for use'. With the above undisputed facts. We are of the clear view that there is no suppression of facts with intent to evade payment of Service Tax on lease rentals on DCE, on the part of the appellant. Therefore we hold that the demand for extended period is clearly time-barred. 6.3 As regard demand of service tax on merit for the normal period, we observed in our above discussions that various vital facts and submissions of the appellant were not properly verified by the adjudicating authority, therefore we remand the case relating to lease rentals and registration fees for the normal period with direction to adjudicating authority to verify whether the contentions made by the appellants are correct with regard to the the....
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.... that though the DCE was deemed sold to Cinema Theatre but ultimate ownership of DCE remains with the appellant. The DCE admittedly used for exhibiting advertisement. The appellant paid service tax on service of sale of space for advertisement which was provided through the said DCE. It therefore leaves no doubt that credit on capital goods is available even if they are removed outside from the premises of the appellant for providing output service. We are therefore of the view that there is no ground for denial of Cenvat credit on capital goods to the appellant. 6.5 We also find that while invoking extended period for demand of Cenvat credit on DCE, in Para 33 of the Order-in-Original, adjudicating authority has admitted that the appellants have disclosed Cenvat credit on capital goods in the return, despite recording this, he has given adverse finding on limitation. Considering the fact that appellants have been paying VAT from 2006 that too at higher rate than the service tax rate, even before SOTGU Services became taxable service, no mala fide can be attributed to invoke extended period for denying Cenvat credit. Placing reliance on Dalmia Cements case of the Madras Hi....