TaxTMI 
TaxTMI 
TaxTMI 
2024 (9) TMI 1793
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....od 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 services". They also submitted that in terms of Assam Sales Tax Act, they were discharging the VAT on such hiring out activity, since it was "deemed sale" under the Assam Sales Tax Act. They relied on the Board Circular No. 334/1/2008 TRU dated 29.2.2008 wherein it has been clarified that if the VAT is paid on any transaction, the same should be taken as excluded from the purview of Service Tax. After due process, the adjudicating authority confirmed demand. On appeal the commissioner appeals affirmed the Order-in-Original and dismissed the appeal filed by the appellant. Being aggrieved the appellant is before the tribunal. 2. The Learned Advocate takes us through to the Agreement entered into between the appellant Oil India Ltd and their client Geo Enpro Petroleum Ltd enclosed at page 94 of the Appeal. 3. He submits that the terms and cond....
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....T-3 returns. The facts of the appellant hiring out their equipments was properly recorded in their books of account and all the hiring charges received by them were being reflected in their P&L account and Balance Sheet. Therefore there is nothing to specify that appellant had indulged in any suppression of facts with an intent to evade the duty for Service Tax. He relies on the case law of Mahanadi Coalfields Ltd CGST & CE, Bhubaneswar-I. The Kolkata Tribunal by its Final Order No. 76599/ 2023 has held that no motive can be attributed for non-payment of service tax by a Public Sector Undertaking. The Tribunal relying on the case law of CCE Indore versus Nepa Ltd set aside the entire on account of time bar. Therefore the appellant submits that the appeal may be allowed even on account of time bar. 8. The Learned AR appearing on behalf of the rated the findings of the lower authorities. He submits that the Agreements do not prove that the effective control was given to the hirer of the equipments. He relies on the case law of Idea Mobile Communications Ltd versus CCE Cochin 2011-23-STR-433-SC. He submits that in this judgment, it has been held that wrong payment of Sales Tax would ....
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....td to Geo Enpro Petroleum Ltd, on going through the terms and conditions it is seen that the effective control for all purposes is given to the client. The appellant is not retaining any rights whatsoever including that of supplying manpower to operate such equipments. Under clause (iv) and (viii) it has been made very clear to the hirer that loss or damage would be to the account of the hirer only. Therefore from this Agreement there is nothing to suggest that the effective control was still remaining with the appellant. On this count itself we hold that the present confirmed demand legally does not sustain. 12. Coming to para 4.4.3 of the Circular No. 334/1/2008 TRU dated 2902.2008, it is clarified that the fact as to whether the transaction will call for Service Tax payment or not can be ascertained from the fact "as to whether or not the VAT is payable or paid". It is noted that 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. 13. We have gone through the sample invoices enclosed at Page 123 and 125 of the Appeal papers. It is seen that the appellant ....
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....ed in the agreement, lead to the conclusion that the transaction envisaged in the agreement is one of "transfer 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, as well as disciplinary control over the drivers, always remained with petitioners. It was petitioner's responsibility to obtain route permits, to take the risk or loss of transportation, to decide the shifts for the drivers and vehicles, to maintain and upkeep the vehicles in good condition. The petitioners contention was that the contra....
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....n before High Court that no assessment of sales tax would be made on the sale value of SIM card supplied by the appellant to their customers, irrespective of the fact whether they have filed Returns and remitted tax or not, whereas in the present case no such facts have been brought in by the department to the effect that the appellant has paid the VAT erroneously which was not required to be paid as per the Assam VAT Tax Act. When the Revenue is not in a position to counter the VAT already paid by the appellant they cannot simply take the stand that the appellants have paid the VAT erroneously, without any corroborative evidence. Therefore the decision of the Supreme Court is distinguishable and cannot be directly applied in the present case. 16. In view of the above findings we hold that the confirmed demand is not legally sustainable on merits. We set aside the impugned order and allow the appeal on merits. 17. We also find considerable force in the appellant's argument that there has been no suppression on their part with an intent to evade the service tax payment. They are a reputed Public Sector Undertaking and they have been discharging the Service Tax and filing their....