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TMI Blog2022 (2) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... or as desired by client, and the gensets are put to use to keep or ensure uninterrupted supply of electricity at the clients place/site. Thus, the use of the gensets is purely on the requirement or order of the clients. It is not necessary that the gensets provided to the client is surely put to use or generate electricity for the period of time for which it is hired by the client, but the genset is dedicated/ delivered to the client and is under his effective control and pocession. In view of such condition, the effective control of the gensets is purely in the hands of the clients of the appellant, as the client is at his liberty to run or not to run the gensets hired by him for generation of electricity. In any case, he is liable to pay the hire or lease rent. The CBEC vide Circular No. 198/08/2016-SERVICE TAX, Dated: August 17, 2016 has provided that in order to distinguish such transactions as sale of goods or supply of services, it is essential to determine whether, in terms of the contract, there is a transfer of the right to use the goods - admittedly the appellant had duly discharged his liability under the VAT/Sales Tax law as per the VAT/ CST returns submitted in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. 5. The department had demanded service tax on the entire consideration received by the appellant during the F.Y. 2011-12 to 2015-16, by issuance of show cause notice dated 31.08.2016, invoking the extended period of limitation. 6. In adjudication, the Ld. Commissioner has held - in respect of the supply of gensets where the appellant has installed generators at the place of clients, and no diesel etc. is provided by him, satisfied the test laid down by the Hon ble Apex Court in the case of Bharat Sanchar Nigam Ltd. (BSNL) Vs Union of India 2006(2)STR 161 SC and by the Hon ble High Court of Andhra Pradesh in the case of State of A.P. Vs Rashtriya Ispat Nigam Ltd. (RINL) (2002) 126 STC 114 (SC), since in such cases the transaction would not merely be a license to use the goods and rather there was transfer of right to use. Accordingly, it was held by the Ld. Commissioner that the appellant was entitled to deduction of turnover corresponding to such contracts, and the consideration against such contracts was not includible in the service tax liability on the assessee, as in such cases the transaction was that of deemed sale. 7. However, the Ld. Commissioner has not consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to use such goods, were liable to service tax. 10. The Ld. SDR appearing on behalf of the revenue has strongly supported the impugned order passed by the Ld. Commissioner, and pleaded that the demand of service tax has rightly been confirmed and the penalties rightly imposed. 11. Shri Abhinav Kalra, Chartered Accountant appearing on behalf of the appellant has assailed the impugned Order passed by the Ld. Commissioner, inter alia on the ground(s)- 11.1 That the Adjudicating Authority has failed to note and appreciate the real nature of the activity undertaken by the appellant. In the present case appellant had transferred the right to use the D.G. sets to its clients, alongwith effective control possession of the same. Therefore, arrangement made between the appellant and its clients for supply of D.G. sets is covered under deemed sale in terms of the Article 366(29A) of the Constitution of India. Accordingly, such transaction is subject to VAT only and thus under no circumstances the same can attract levy of service tax. Reliance is placed on the ruling in CST, Delhi vs. ITD ITD Chem Joint Venture -2015 (1) TMI 1262-CESTAT, New Delhi. 11.2 For the period 01.04. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herwise requires, the following expressions have, the meanings hereby respectively assigned to them, that is to say (29A) tax on the sale or purchase of goods includes- (d) a tax on 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; (emphasis supplied) 14. In view of the Article 366(29A)(d) of the Constitution, 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, has to be considered as deemed sale or purchase of goods. 15. In the instant case it is observed that the appellant have supplied the mobile gensets to his clients for short periods along with technicians and fuel. It is the requirement of the client to use such gensets when there is no electricity or the electricity goes off or as desired by client, and the gensets are put to use to keep or ensure uninterrupted supply of electricity at the clients place/site. 15.1 Thus, the use of the gensets is purely on the requirement or order of the clients. It is not necessary that the gensets provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant. 18. The CBEC vide Circular No. 198/08/2016-SERVICE TAX, Dated: August 17, 2016 has provided that in order to distinguish such transactions as sale of goods or supply of services, it is essential to determine whether, in terms of the contract, there is a transfer of the right to use the goods. Since the supply of the gensets meets the criteria mentioned by the Apex Court, we consider the supply of gensets is sale of goods in terms of Article 266(29A) of the Constitution of India. 19. Moreover, we find that admittedly the appellant had duly discharged his liability under the VAT/Sales Tax law as per the VAT/ CST returns submitted in the paper book before this Court, and also it is an admitted fact in the order in original. Therefore, there remains no liability on the part of the appellant under the Service Tax law. 20. In view of the aforementioned observations and findings, we allow the appeal filed by the appellant and set-aside the impugned Order passed by the Ld. Commissioner. Appellant shall be entitled to consequential relief as per law. 21. Under the facts circumstances, it being an issue of interpretation and no case of concealment found, etc. is mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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