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TMI Blog2022 (12) TMI 1440X X X X Extracts X X X X X X X X Extracts X X X X ..... such as Electrical, Pollution, CCR have to be taken by the Customers, the lessee shall ensure the safety of the plant in a manner similar to its own plant. Customers have to provide fuel, Jacket water feed water, the site and other facilities. On going through the clauses of agreement, it is found that the appellants had handed over the Goods‟ possession to the lessee as also the right to use. Therefore the transaction of appellant does not satisfy the condition of without transferring right of possession and the effective control of such machinery, equipment and appliances . Hence the activity does not fall under the definition of Supply of tangible goods for use . The adjudicating authority has held that since as per contract the equipment will remain sole property of equipment provider and skilled manpower supplied by the Appellant are responsible for maintenance operations of gas genset/plant, it is clear that the legal right and effective controls rests with the appellant - There is separate service agreement entered between the Appellant and customer under which various services are provided on which service tax has been discharged by the Appellant. Once the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est and penalty 1.2 Briefly the facts of the present cases are that the appellant is engaged in providing of services classified under the category of Management, Maintenance or Repair Service, Erection, Commissioning or Installation Service, Manpower Recruitment or Supply Agency‟s Services etc. and is registered under the Service Tax. During the course of Audit, it was observed by the department that Appellant had leased out Power Generating and Heat Recovery Equipments to various parties under various Lease Agreements. For the same, Appellant charged rent termed as Lease Charges‟ under the head Standby Charges and Variable Charges, for which lessee Parties pay an advance and Bank Guarantee to the Appellant. For that the VAT was collected from the lessee on the lease charges and paid by the Appellant (Lessor) but no service tax is being discharged thereon. Further it was also observed that the Appellant has also made separate Manpower Service Agreement‟ with the respective lessee parties, which reveal that the Appellant had supplied skilled/ semi-skilled manpower in the premises of the respective parties to run and operate effectively the afo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use to goods. 2.1 He also submits that appellant are the owner of the gas genset/ plant. The Appellant have leased the plant to their Customers for their use for the purpose of manufacture of their final products, and collected rent from the Customers as standby charge and variable charge basis under the agreement. Once the plant / goods are transferred by the Appellant to their customers for their use, the rights to use as existing with the Appellant terminate when the plant/ goods are transferred and vest with customers. The customers have to provide (i) fuel (ii) jacket water feed water (iii) the site and (iv) other facilities, and the entire control of the plant therefore vests with the customers and not with the Appellant. Further, the customers will also indemnify the appellants against any loss or damage arising to or in connection with the plant for the reason other than commissioning and maintenance of the plant by the Appellant‟s personnel. Moreover, the Appellants under the terms of the agreement have agreed not to sell the Plant which becomes the property of the Customers to any party during the term of the agreement and up to renewal, if any. Thus, during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LT 316 (AP) (iv) CST Vs. UFO Movies India Ltd. 2022 -VIL-07-SC-ST (v) CST Vs. UFO Moviez India Ltd, - 2021-VIL-11-SC-ST (vi) UFO Moviez India Ltd. Vs. CST 2017-VIL-774-CESTAT-ST (vii) Subhash Light House Vs. CGST 2022-VIL-106-CESTAT-ST (viii) Express Engineers Spares Pvt. Ltd. Vs. CGST 2022 (1) TMI564-CESTAT- ALLAHABAD (ix) You Broadband Cable India Ltd. Vs. CCE 2020(2) TMI 187- CESTAT Ahmedabad (x) GE Power Services India Pvt. Ltd. Vs. PCCST 2021(2)TMI 83- CESTAT (xi) Computation Software Ltd. Vs. CST 2019(25)GSTL 75 (T) (xii) GIMMCO Ltd. Vs. CCE 2017(48)STR 476 (T) (xiii) Lindstrom Service India Pvt. Ltd. Vs. CCE- 2020 (33) GSTL 391 (T) (xiv) Century Pulp and Paper Vs. CCE 2019 (29) GSTL 42 (T) (xv) CCE Vs. Brindavan Bottlers Ltd. 2019 (27) GSTL 354 (T) (xvi) Satish Crane Services Vs. CCE 2019 (25) GSTL 115(T) (xvii) Bharat Sanchar Nigam Ltd. Vs. Union of India 2006 (2) STR 161 (SC) (xviii) Petronet LNG Ltd. Vs. CST 2016(46)STR 337 (SC) (xix) Imagic Creative Pvt. Ltd. Vs. CCT 2008 (9) STR 337(SC) (xx) Heligo Charters Pvt. Ltd. Vs. CST 2017-TIOL-2831-CESTAT - MUM (xxi) CST Vs. Adani Gas Ltd. 2020(8) TMI-78 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods; and (3) The right of possession and effective control of such goods must not have passed on to the transferee. Once these above three conditions are satisfied, the provisions of the said entry will be attracted. 4.3 We find that in the present matter there is no dispute related to the above first two conditions. The disputes, centres around the third conditions, that whether the transaction between the Appellant and its customers would involve the transfer of right of possession and effective control or a transfer of right to use. To examine this issue, it would be appropriate to refer to the agreement entered into between the appellant and its customers. As noted, the appellant supplies Power Generating Equipments / gas genset (Plant) to Customers on standby charges and variable charges basis under the agreement. We find that during the subsistence of the agreement, the lessee alone has the right to use the Plant and even the Appellant cannot trespass that right of the lessees/ customers. The Lessees fix the pattern in which the plant is to be used and the time when it will function. All the permission to be obtained from the statutory authorities to be obtained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right to use the goods the transaction must have the following attributes: a. There must be goods available for delivery; b. There must be a consensus ad idem as to the identity of the goods; c. The transferee should have a legal right to use the goods -consequently all legal consequences of such use including any permissions or licenses required therefor should be available to the transferee; d. For the period during which 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 . 4.5 In the light of above discussion and observations of Hon‟ble Supreme Court, we note that Appellant have complied with all the tests as laid down in the above case to hold that there is transfer of right to use gas genset. Thus the activity is not in the nature of service‟ under the Finance Act in both during the period pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase of goods includes - (a) a tax on the transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration; (b) a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract; (c) a tax on the delivery of goods on hire purchase or any system of payment by instalments; (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; (e) a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; (f) a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the ..... 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