TMI Blog2024 (2) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of oncological research, without transferring the possession or control. The exclusive possession with right to use the goods was given by the Appellant to M/s. FKOL, who were free to use the goods. It is further found from the Clause 2.7 of the agreement, which provides that even if the Appellant decides to sell or transfer its right, title or interest in the goods during the term or the extended term for right to use granted, the Appellant shall take prior consent from FKOL and further ensure that right to use of FKOL under the agreement are not disturbed/preserved and their interest is not prejudicially effected. Thus, evidently, the Appellant had granted exclusive right to use without disturbance or encumbrance to their clients FKOL and accordingly, it is held that they have rightly paid the Sales Tax/VAT on transfer of right to use the goods, to their customers, which is a transaction of deemed sale. Accordingly, it is held that service tax is not attracted. The impugned order is set aside - appeal allowed. - HON BLE MR. P. K. CHOUDHARY , MEMBER ( JUDICIAL ) And HON BLE MR. SANJIV SRIVASTAVA , MEMBER ( TECHNICAL ) Shri Atul Gupta , Advocate Shri Prakha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.10,000/- under Section 77 of the Finance Act, 1944. Being aggrieved, The Appellant filed an appeal before the learned Commissioner (Appeals). Learned Commissioner (Appeals) in the impugned Order-In-Appeal, recalculated the demand to Rs.39,86,350/-. Hence the present appeal before the Tribunal. 9. Ld. Counsel appearing on behalf of the Appellant urges as under : - 9.1 It is urged that the taxable service with reference to supply of tangible goods has been defined under Section 65(105)(zzzz) of the Finance Act, 1994 and reads as under:- Taxable service means any service provided to any person, by any person in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring right of possession and effective control of such machinery, equipment and appliances. ( emp. Supplied ) 9.2 The scope of service was clarified by the Government vide D.O.F. No.334/1/2008-TRU dated 29.02.2008 as under:- 4.4 Supply of tangible goods for use: 4.4.1 Transfer of the right to use any goods is leviable to sales tax/VAT as deemed sale of goods [Article 366 (29A) (d) of the Constitution of India]. Transfer of right to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned orders and allow all the three appeals. ( emp. supplied ) 9.4 That consequent upon the 46th amendment, Article 366(29A)(d) of the Constitution of India defines tax on sale or purchase of goods includes a tax on the transfer of right to use any goods for any purpose for cash, deferred payment or other valuable consideration. 9.5 The aforementioned constitutional provisions have been the subject matter of interpretation by various courts. The Hon ble Supreme Court in the case of Bharat Sanchar Nigam Ltd v. UOI [2006 (2) STR 161. (SC)] has discussed the different aspects involved in such transaction and came to the conclusion that to constitute a transaction for transfer of right to use the goods the transaction must have the following attributes: a. There must be goods available for delivery. b. There must be consensus ad idem as to the identity of the goods. c. The transferee should have a legal right to use the goods -consequently all the legal consequences of such use including any permission or licenses required therefore should be available to the transferee. d. For the period during which the transferee has such right, it has to be to the excl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noted as follows: What is permitted under the contract is, a permission in the nature of a licence to have access to the passive infrastructure and permission to keep the equipments of the mobile operator in the pre-fabricated shelter with permission to have ingress and egress only to the authorised representatives of the mobile operator . 9.12 Whereas in the present case, the customer was having right to use the goods for the purpose of doing research as contemplated under the Agreement. 9.13 It is also submitted that since the transaction was only a deemed sale, therefore, the sales tax was paid as and when consideration for such a transaction of right to use was received. In such cases, sales tax is not paid at the time of agreement to transfer the right to use goods. 9.14 The finding regarding discrepancy in payment received and payment of VAT under paragraph 5.8 is factually incorrect, as the court below have not taken into account the amount of additional VAT paid (which was payable in addition to normal applicable VAT). The amount of the transaction was INR 1,11,96,172.25 plus VAT amount INR 4,47,846.89 (@4%)plus additional VAT INR 55,980.75 (@0.5%) Totalling ..... X X X X Extracts X X X X X X X X Extracts X X X X
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