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2022 (1) TMI 564 - AT - Service TaxRecovery of service tax - supply of tangible goods for use [STGU] service or not - supply of diesel generators to customers on hire basis - period 01.04.2011 to 30.06.2012 - declared service involving “transfer of goods by way of hiring, leasing, licensing, or in any such manner without transfer of right to use such goods” under section 66E(f) of the Finance Act for the period 01.07.2012 to 31.03.2015 - 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? - extended period of limitation - HELD THAT:- It can safely be said that under Sales Tax, there is transfer of possession and effective control in goods, while there is no such transfer of possession and effective control under service tax - the transaction between the Appellant and the customers would qualify as a transfer of right to use goods with the control and possession over the diesel generator sets passing on to the customers. The transportation and installation of diesel generator sets at the site of the customers cannot lead to a conclusion that the Appellant was rendering STGU service. The Agreement itself provides that the Appellant would be responsible for providing diesel generator sets to the customers. It was, therefore, imperative for the Appellant to ensure that the diesel generator sets were transported and installed at the site of the customer - Though, the Appellant may be providing operators to the customer, but these operators were working entirely under the direction and control of the customers and the Appellant had no control over them. Thus, so long as the effective control over the diesel generator sets remained with the customers, the mere providing of operators who were also under the direction and control of the customers, would not mean that the transaction was not that of sale. It is more than apparent that the supply of diesel generator sets to the customers would not amount to STGU service for the period from 01.04.2011 to 30.06.2012, or a declared service from 01.07.2012 to 2014-15. The orders passed by the Commissioner (Appeals), therefore, cannot be sustained. Extended period of limitation - HELD THAT:- It would not be necessary to examine the contention raised by the Appellant that the extended period of limitation could not have been invoked. Appeal allowed - decided in favor of appellant.
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