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TMI Blog2024 (7) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... s other parties. In view thereof and in view of the above discussion about various statutory provisions and the case law, there are no reason to differ from the findings arrived at by the original adjudicating authority - Mere presence of another clause agreeing for VAT to be paid at the rate of 5% is held highly insufficient to call the impugned transaction as a transaction of deemed sale in terms of article 366 (29 A) of the Constitution of India. Extended period of limitation - HELD THAT:- The activity in question is a taxable service namely Supply of Tangible Goods . Payment of VAT is insufficient to alter said status when apparently complete possessions and the effective control of cranes was not transferred by the appellants. Hence this act of appellant is rightly been held as an act of misrepresentation getting themselves not registered with the service tax department. Despite rendering a taxable service is rightly held as an act of suppression. Hence, there are no fault when the extended period of limitation has been invoked while issuing the show cause notice. There are no infirmity in the order under challenge/Order-in-Original - appeal dismissed. - MR. RAJU, MEMBER (TE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vention of section 66 of Finance Act by not getting themselves registered. This is alleged to be an act of suppression of facts and contravention of the provisions of the Act. The proposal of said Show Cause Notice has been confirmed vide Order-in-Original No.20/2015 dated 31.03.2015 dated 31.03.2015. Being aggrieved of this order the appellant is before this Tribunal. 3. We have heard Ms. J. Kainaat, ld. Counsel for the appellant and Mr. Harshvardhan, Authorised Representative for the Department. 4. Ld. Counsel for the appellant has mentioned that the appellants were providing cranes to different clients on hire basis for different period like 3 months, 6 months etc. It is impressed upon that as per the agreements between appellant and their clients the appellants were paying VAT at the rate of 5% of the value involved. The invoices raised are also clearly showing payment of VAT at the rate of 5%. The requisite agreements, invoices alongwith other documents as that of balance sheet profit and loss account, auditor s report etc. for the impugned period were duly provided to the Department. The agreements are sufficient to show that the cranes were transferred with right of possessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gible goods service. Impressing upon no infirmity in the said order, the appeal is prayed to be dismissed. 7. Having heard the rival contentions of both the parties we observe that the moot question to be adjudicated for the present appeal is : Whether supply of crane on hire basis by the appellant is an activity of Deemed Sale (Article 366 (29A) of Constitution of India) or it is a taxable service namely, Supply of Tangible Goods (herein referred as STGU). 8. To appreciate, whether service tax can be levied on the transaction, it would be necessary to analyze the relevant statutory provisions as they existed prior to 01.07.2012. 9. Section 65(105)(zzzzj) of the Finance Act, which would be relevant for the period prior to 01.07.2012 defines taxable STGU as follows:- (105) taxable service means any service provided or to be provided, - (zzzzj) 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 appliance. 10. Thus, what has to be seen for transaction of transfer of goods to be taxable as a service, is: i. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se the goods consequently all legal consequences of such use including any permission or licenses required therefore should be available to the transferee; d. For the period during which the transferee has such legal right, it has to be the exclusion of 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 license 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. (emphasis supplied) 14. From the above discussed provision of Finance Act and of the Constitution of India, it can safely be said that transfer of use of goods is leviable to VAT under Sales Tax if goods to be used are transferred with possession and effective control in goods. If there is transfer of goods for use but the possession and effective control while transferring the goods is retained with the supplies of goods, the transaction is SUTG taxable under service tax. 15. Now reverting to the facts of the present case, we observe that the original adjudicating authority has examined following agreements a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the said para reads as follows:- 4.4 Supply of Tangible Goods Services: 4.4.1 Transfer of the right to use any goods is leviable to sales tax/VAT as deemed 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 supply of tangible goods, including machinery, equipment and appliances, for use, with no legal right of possession or effective control. Supply of tangible goods for use and leviable to VAT/sales tax as deemed sale of goods, is not covered under the scope of the proposed service. Whether a transaction ..... 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