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2024 (1) TMI 452 - AT - Service TaxClassification of services - supply of tangible goods for use services or not - hiring of the equipment by the appellants to the client - HELD THAT:- The services can be classified under supply of tangible goods for use service only when right to possession and effective control of the equipment is not transferred to the service recipient. In the present case as per arrangement between the appellant and the service recipient, since after giving the equipment on hire to the service recipient, the right to possession and effective control is with the service recipient who possessed the equipment and operated the same with their own employee. It is also undisputed fact that the appellants have discharged the VAT considering the same as deemed sale under Article 366 (29A) of Constitution of India. Therefore, the hiring of equipment under this fact cannot be classified as supply of tangible goods for use service in terms of Section 65 (105) (zzzj) of Finance Act, 1994. The Hon’ble Supreme Court in UFO Moviez India Limited [2017 (9) TMI 507 - CESTAT MUMBAI] has given the observation that where the VAT is paid no service tax can be demanded. The impugned orders are set aside - Appeals are allowed.
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