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2024 (2) TMI 199 - CESTAT ALLAHABADRecovery of Service tax alongwith interest and penalties - Supply of Tangible Goods - appellant had provided the excavators & JCB machines without transferring right of possession & effective control on the same, to their service recipients for which they received the monthly hiring charges - HELD THAT:- In case of PETRONET LNG LTD VERSUS COMMISSIONER OF SERVICE TAX [2013 (11) TMI 1011 - CESTAT NEW DELHI], Delhi Bench held Since we have concluded that the transactions in issue, covered by the long-term charter agreements and the short-term charter agreement in respect of the tankers - “Disha”; “Raahi”; and “Trinity Glory” amount to transfer of the right of use with possession and effective control, by owners in favour of the assessee; that the transactions are therefore covered by the exclusionary clause of Section 65(105)(zzzzj); that the long-term charter agreements (in respect of - “Disha”; and “Raahi”) were entered into prior to 15-5-2008; and the tankers were also delivered to the assessee prior to introduction of the new taxable service “STGU”; the taxable event of supply of tangible goods for uses has taken place prior to introduction of the taxable service; and that though hire charges for the actual use were remitted subsequently and periodically, no Service Tax is leviable. In the case of M/S. GIMMCO LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, NAGPUR (VICE-VERSA) [2016 (12) TMI 394 - CESTAT MUMBAI] Mumbai bench has held the transaction involved was a transfer of right to use Transit Mixers and not transport service and the petitioners had transferred the „right to use goods’ to Grasim. If we apply the ratio of the above decision to the facts of the present case, the transaction involved herein is “transfer of right to use” which is a deemed sale and not “supply of tangible goods for use” service. Allahabad bench has in the case of M/S EXPRESS ENGINEERS & SPARES PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS & SERVICE TAX, GHAZIABAD AND SH. NARESH KUMAR GUPTA (DIRECTOR) VERSUS COMMISSIONER, CENTRAL TAX, GST & CENTRAL EXCISE, MEERUT [2022 (1) TMI 564 - CESTAT ALLAHABAD] held he finding in the impugned order that since the appellant was responsible for the maintenance and repair of the diesel generator sets, the appellant has retained effective control, cannot also be sustained because once the control and possession of the diesel generator sets was transferred to the customers, mere maintenance or repair work will not change the nature of the transaction. Since it is found that the facts of the case in hand, as noted in the impugned order, are identical to the above referred decisions, the issue stands settled by these decisions in favour of the appellant. As the issue is decided on the merits of case itself in favour of the appellant, it is nor necessary to consider the issue on limitation. As the demand of service tax cannot be sustained so the demand of interest and penalties imposed also need to be set aside. Appeal allowed.
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