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2019 (5) TMI 240 - AT - Service TaxNature of transaction - deemed sale or service - appellant has recovered rent charges towards rents of gas cylinders obtained by them from the appellant for the period from 2009-10 to 2012-13 - whether falls under the the “Supply of Tangible Goods Service” for use without transfer of right of possession/control? - HELD THAT:- For the supply of tangible goods is for use by other person but without transferring right of possession and effective control, then only such supply shall classify under the taxable services of supply of tangible goods\service. After giving the cylinders on lease during the entire period of MOU, the effective right of possession, the effective control is with the lessee and not with the appellant. As per the definition of ‘supply of tangible goods’, the supply will fall under the taxable services only when right to possession and effective control is not transferred. Therefore, supply of tangible goods on lease basis with transfer of right to possession and effective control will go out of ambit of taxable services. Moreover this transaction is undisputedly liable to VAT as the appellant are paying the VAT as per the provision of the State Government VAT Act. Thus, the services would not fall under the category of ‘tangible goods for use’ - appeal allowed - decided in favor of appellant.
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