TaxTMI 
TaxTMI 
2024 (12) TMI 607
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.... of rent by the lessees to the Appellant on which VAT was being discharged on the lease rent, however, no service tax was being paid by the appellant. 1.1 In the course of audit of the Appellant's records by the Service tax department, wherein the said transactions of lease on payment of VAT were reflected, the audit department entertained the view that the same were liable to service tax and accordingly, by letter dated 27.01.2017, sought the Appellant's explanation. 1.2 By letter dated 21.02.2017, the Appellant responded to the audit department and explained that since there was a transfer of right of use/possession and effective control, there was a deemed sale on which VAT was being discharged and therefore there was no service. ....
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....nce Act, 1994. He further imposed penalty under Section 78 of the said Act. The Assistant Commissioner held that since the ownership of the goods has not changed, there was no deemed sale. He further held that though the lessee was going to use the goods, that does not imply that there was transfer of right to use. 1.6 The Commissioner (Appeals) upheld the said Order-in-Original dated 12-4-2018 by Order-in-Appeal dated 30.08.2018. The Commissioner (Appeals) has also proceeded on the basis that since the ownership of the goods had not been transferred there was no transfer of right to use. The present appeal has been preferred by the Appellant against the said Order-in-Appeal dated 30.08.2018. 2. Ms. Shmita Patel, Learned Counsel appea....
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.... v Rashtriya Ispat Nigam Ltd - 2002 (3) TMI 705-Supreme Court. He further reiterated the findings given in the impugned Order. 4. Heard both sides and perused records. The principal issue that arise for consideration in this appeal is whether the leasing of "Scaffolding items" by the Appellant, on which, admittedly VAT has been paid as Deemed sale within meaning of Article 366 (29A) (d) of the Constitution of India, is liable to service tax. We have noticed the following clauses appearing in the lease contracts, as reproduced in the Order-In-Original:- a) Clause 6 of the contract, as per which the lessee got the right to use the Scaffolding materials and the Appellant did not have any direct or indirect control over the Scaffold....
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....ty to bring back the material at the Lessee's cost. 4.2 Since there was clearly a transfer of the right to use the materials in favour of the Lessee, the same was liable to Sales Tax/ VAT, being a deemed sale within the meaning of Article 366 (29A) (d) of the Constitution of India and accordingly, VAT was being discharged on the lease rent, which is apparent from the Invoices raised by the Appellant on the lessees. 4.3 Since there was transfer of right to use the materials in favour of the Lessee and the possession and effective control was with Lessee and VAT was accordingly paid as Deemed Sale, in our view, the transaction does not amount to Declared Service under Section 66E (f) as in force from July 2012, nor does it amount to the....
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....had granted lease of earth moving equipment to various customers. It is mentioned in Para 3 of the decision that VAT was paid on the lease. The Tribunal in Para 5.2 noted that as per the agreement, the lessee was to be responsible for the safety of the equipment and liable for any loss or damage to the equipment while in use by the lessee, which showed that the use, possession and control was of the lessee. It was held that the lease was accordingly not service of supply of tangible goods without transfer of possession and effective control. This decision was followed by this Tribunal in GIMMCO Ltd v CST-2024 (1) TMI 182-CESTAT AHMEDABAD. iv. Express Engineers & Spares P. Ltd v Commissioner-2022 (64) GSTL 112: In this decision, the....