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2017 (8) TMI 637 - AT - Service TaxClassification of service - taking two helicopters on lease from the two foreign lessors ADA, Abu Dhabi and BLFIL, Ireland on dry lease basis - activity is in the nature of sales (deemed sale) or service - Business Support Service or activity as supply of tangible goods for use without transfer of right of possession and effective control - Held that: - for the period prior to 01.07.2012, inspite of the transactions, in question, being deemed sale and, hence, not covered by the section 65(105)(zzzzj) pertaining to Supply of Tangible Goods for use without involving transfer of right of possession and effective control over the goods, the Commissioner has still gone on to subject them to service tax by classifying the same as Business Support Service (infrastructure support service u/s 65(105)(zzzq) r/w section 65(104c)) of the Act The Commissioners findings for the period w.e.f. 01.07.2012 holding that the leasing of helicopters by the Appellant from the two lessors located abroad is a service not covered by the Negative List or any exemption, is absurd, as he has not even discussed the definition of service given in Section 65B(44) r/w definition of declared service in Section 66E of the Finance Act 1994, and how the transactions, in question, which admittedly involve transfer of right of possession and effective control over the goods during the period of lease would be covered by the above mentioned definition of service. As discussed above, since the leasing of helicopters by the Appellant from the two lessors abroad involves transfer of right of possession and effective control over the helicopters/transfer of right to use the helicopters from the lessors to the Appellant during the period of lease, these transactions being deemed sale covered by Article 366 (29A)(d) of the Constitution ,are not covered by the definition of service as given in Section 65B(44) read with Section 66E of the Finance Act, 1994 and, hence, there is no question of levying Service Tax on these transactions. As per the agreements with lessors, the transaction is of deemed sale within the manning of Article 366 (29A) of Constitution. Therefore mere non payment of sales tax will not alter the status of deemed sale in the facts of the present case. Demand of service tax, interest and penalty set aside - Appeal allowed - decided in favor of appellant.
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