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2021 (1) TMI 103 - AT - Service TaxRent-a-cab scheme operator Service - Deemed Sale - constitutionally demarcated exclusion of the authority of the Union that precluded statutory enactment of tax on transactions of sale - section 73(1A) of Finance Act, 1994 - HELD THAT:- It is not in dispute that the tax liability confirmed in the impugned order were demanded in statements issued, under section 73(1A) of Finance Act, 1994, by reference to facts, and evidence, elaborated in the first show cause notice for the period from 1st April 2008 to 30th September 2012 which straddles the service enumerated in section 65(105)(o) of Finance Act, 1994 and the successor ‘negative list’ regime. The disputed tax in the present appeal pertains to leviability in the ‘negative list’ regime as provider of service relating to lease of motor vehicles and on the entire consideration received as rentals from customers. The fitment for taxability under Finance Act, 1994, ignoring the scheme of distribution of exclusive tax jurisdictions in the lists of the Seventh Schedule of the Constitution, within the definitions therein was considered by the Tribunal in ARVAL INDIA PRIVATE LIMITED VERSUS PRINCIPAL COMMISSIONER OF SERVICE TAX – IV AND (VICE-VERSA) MR CJ MATHEW, MEMBER (TECHNICAL) [2020 (9) TMI 125 - CESTAT MUMBAI] that decided the appeal against the demands for the earlier periods with the core of the dispute and, drawing upon the judgement of the Hon’ble Supreme Court on the constitutional constraints in taxing that part of ‘works contract’ transaction deemed to be sale, to hold that the jurisdiction enabled by articulation of legislative intent specifically to tax ‘service component’ - not deemed as ‘sale’ - in ‘works contract’ could not be appropriated by applying a non-specific description in Finance Act, 1994 to transactions that were taxed entirely as ‘sale’. As decided in earlier decision of the appellant, Agreements/contracts of ‘lease’ are, acknowledgedly, taxable as ‘deemed sale’; it is not the case of Revenue that any portion of the consideration for ‘lease’ is not ‘deemed sale’. As the entire rental is subject to tax as ‘deemed sale’, there is no scope for any portion thereof to be leviable to tax by the Union and, thereby, under Finance Act, 1994 Appeal allowed - decided in favor of appellant.
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