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2020 (3) TMI 916 - AT - Service TaxNature of activity - service or sale - appellant has made payment towards tanker hire charge to various foreign suppliers in foreign currency for hiring ISO tanker which was mostly used for export purpose - case of Department is that ISO tank owned in such a case does not transfer the right of possession and no VAT/Sales Tax has been paid, it is liable to classify under “supply of tangible goods service’ - reverse charge mechanism - HELD THAT:- The appellant have referred to a contract under which ISO tank was hired by them on lease from foreign supplier. The Adjudicating Authority as well as the appellate authority has held that the renting of ISO tank falls under the category of “supply of tangible goods service” only on the reasoning that there is no transfer of right of possession and effective control in respect of the leased ISO tank. However, no proper reasoning was given as how there is no transfer of right to possession and effective control. From the facts narrated by the learned counsel, it is found that after supply of ISO tank the same was under their control, was operated by them with their own employees, and repair and maintenance if any was also carried out by the appellant themselves. Thus, the right to use and effective control was with appellant. However, both the lower authorities have not carefully gone through the contract and not given reasoning under the given facts on why there is no transfer of right and effective control by the foreign supplier to the appellant. Therefore, the matter needs to be reconsidered carefully by the Adjudicating Authority. Also, the Adjudicating Authority has contended that since there is no payment of VAT, the transaction is not a deemed sale. Matter remanded to the Adjudicating Authority for passing a fresh order after providing sufficient opportunities to the appellant - appeal allowed by way of remand.
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