TaxTMI 
TaxTMI 
2025 (7) TMI 2037
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....ivity undertaken by the appellant falls under the definition of 'Supply of Tangible Goods' service as per Section 65(105)(zzzz) of Finance Act, 1994. The Commissioner (Appeals) in the impugned order observing that the activities undertaken by the appellant is not sale but involves right to use and hence, correctly classifiable under the definition of 'Supply of Tangible Goods' for use. Accordingly, demand was confirmed along with penalty under Section 78. Aggrieved by this, order the appellant is in appeal before us. 2. The Learned Counsel for the appellant submits that during the relevant period of dispute, the appellant had entered into an 'Lease Agreement' dated 20.03.2009 with M/s. UT Fabrication Pvt. Ltd. wherein the appellant had l....
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.... of possession by lease agreement cannot be termed as sale. 4. Heard both sides. During the relevant period of dispute i.e., from 2008-09 to 2011-12, the appellant had rented out certain machineries to its subsidiary company along with transformers, for which rent was being collected. The relevant Provisions based on which the demand is confirmed are reproduced below: Section 65 (105)(zzzzj) defines supply of tangible goods as "to any person, by any other person in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring right of possession and effective control of such machinery, equipment and appliances". The only question to be addressed here is whether the goods have....
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....hich the transferee has such legal right, it has to be the exclusion to the transferor this is the necessary concomitant of the plain language of the statute viz. a transfer of the right to use and not merely a licence to use the goods; (e) Having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same rights to others". 3.3 We find that Supreme Court in the Great Eastem Shipping Company Ltd. v. State of Karnataka (supra) held that:- "33. When we peruse the various terms and conditions of the Charter Party Agreement (Annexure 1), clause 1 provides that the contractors "let" and the charterer "hire" the goods vessel for six months. The exp....
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....available for delivery. In the instant case, the vessel was available for delivery and in fact, had been delivered. There is no dispute as to the vessel and the charterer has a legal right to use the goods, and the permission/licence has been made available to the charterer to the exclusion of the contractor. Thus, there is complete transfer of the right to use. It cannot be said that the agreement and the conditions subject to which it has been made, is not a transfer of right to use the goods, during the period of six months, the contractor has no right to give the vessel for use to anyone else. Thus in view of the provisions inserted in Article 366(29A)(d), Section 5C, and definition of 'sale' in Section 2 of the KST Act, there i....
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....Court in the case of Aggarwal Brothers v. Haryana and Another (supra) have held that: "5. The said Act defines 'sale' to mean the transfer of property in goods for cash or deferred payment or other valuable consideration and includes the "transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration. Such transfer of the right to use goods for consideration is "deemed to be a sale. The provision expressly speaks of "transfer of the right to use goods and not of transfer of goods. There is, therefore, no merit in the submission that to be a deemed sale within the meaning of the abovementioned provision of the said Act there must be a ....