TaxTMI 
TaxTMI 
2025 (4) TMI 957
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....s were received from the persons who were taking these equipments on hire. The Revenue took the view that for various equipments thus hired out by the appellant, the receiver of such service was paying them the consideration. On the ground that this service will amount to "supply of tangible goods service", a show cause notice was issued for the period July 08 to Mar 2009 by invoking the extended period provisions. The appellant submitted copies of the Agreements entered into with the hirers of the equipment to show that the effective control of the equipments was with the hirers and not with the appellant. Therefore, the appellant argued that the service did not qualify to be charged under service tax in terms of "supply of tangible goods ....
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.... 77166/2024 dated 11/09/2024, this Bench in their own case on account of identical issue for the period July 2008 to March 2009 has held that since VAT has been paid, no Service Tax is required to be paid. He submits that the period involved in the present case is for the period April 2009 to September 2012 on account of the periodical notice issued by the Revenue. Therefore, he prays that the present appeal may be allowed. 3. The Learned AR submits that the Commissioner has not decided the issue on merits but has dismissed the appellant's appeal on the ground of non-fulfillment of pre-deposit condition. Therefore, he submits that the matter may be remanded to the Commissioner (Appeals). 4. In the re-joinder, the Learned Advocate submits ....
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....eemed sale of goods (Article 366(29A)(d) of the Constitution of India). Transfer of right to use involves transfer of both possession and control of the goods to the user of the goods. 4.4.2 Excavators, wheel loaders, dump trucks, crawler carriers, compaction equipment, cranes, etc., offshore construction vessels & barges, geo-technical vessels, tug and barge flotillas, rigs and high value machineries are supplied for use, with no legal right of possession and effective control. Transaction of allowing another person to use the goods, without giving legal right of possession and effective control, not being treated as sale of goods, is treated as service. 4.4.3 Proposal is to levy service tax on such services provided in relation to s....
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....the word used therein is whether VAT is payable or paid. This means that even if it is payable but not paid by the appellants still the exemption from Service Tax would apply. 14. Coming to the case law of Gimmco Ltd cited by the appellant, it we observed that the issue therein was identical. The Tribunal has held as under: "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 th....
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....er of right to use" which 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....
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....provals, concessions, licences and permits 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....