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2021 (2) TMI 1099 - HC - Service TaxLevy of Service Tax - supply of tangible goods - transfer of right to use or not - petitioner was providing material handling object, namely, cranes to Bharath Heavy Electricals Limited (BHEL), the sixth respondent herein, on “transfer of right to use” basis - Section 4 of the Tamil Nadu Value Added Tax Act, 2006 - HELD THAT:- The petitioner has rendered service. It was supplying tangible goods, viz. 10T Mobile Cranes numbering 11/12 on daily rental basis. These material handling equipments were hired by the sixth respondent BHEL as per the agreement dated 07.12.2011. The terms of the agreement which has been extracted above indicate that the petitioner has not transferred the Mobile Cranes to the sixth respondent BHEL. On the other hand, the petitioner has provided its driver for operating the Cranes. It was under the supervision of the sixth respondent BHEL. The agreement further states that crew of the petitioner who worked during the first shift shall not be engaged in the second shift - Under the agreement, the petitioner was merely required to supply required number of cranes for the purpose of material handling and for the purpose of loading/unloading. The facts that the lifts will be operated by the drivers of the petitioner and that the crane will not be parked inside the 6th respondent BHEL premises after the stipulated working hours make its clear that it is the petitioner who was in effective control of these material handle equipments / cranes. Further, the agreement also indicates that trip register should be maintained by the petitioner's driver and that in case the loss of original trip register, the sixth respondent BHEL should not entertain the claim of the petitioner. In RASHTRIYA ISPAT NIGAM LTD. VERSUS COMMERCIAL TAX OFFICER, COMPANY CIRCLE, VISAKHAPATNAM [1989 (12) TMI 325 - ANDHRA PRADESH HIGH COURT], the the Andra Pradesh High Court came to a conclusion that the transfer of right to use goods necessarily involves delivery of possession by the transferor to the transferee and transfer to effective control. There is neither transfer of effective control nor transfer of possession over the material handling equipments / cranes in favour of the sixth respondent BHEL under the agreement - Petition allowed - decided in favor of petitioner.
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