Page 128 - GSTL_3rd September 2020_Vol 40_Part 1

62 GST LAW TIMES [ Vol. 40
the foreign owners. Accordingly, show cause notice proposing recovery of Ser-
vice Tax not paid along with interest and imposition of penalties was issued. The
Adjudicating Authority vide Order-in-Original confirmed the demand with in-
terest and imposed penalty under Section 76 and 77 of the Finance Act, 1994. Be-
ing aggrieved with the Order-in-Original, the appellant filed appeal before the
Commissioner (Appeals) on the ground that ISO tank was handed over to the
appellant with full right of possession and effective control during the renting
period with their own labour force to operate including repair and maintenance.
The Learned Commissioner dismissed the appeal and upheld the Order-in-
Original. Therefore, the present appeal filed by the appellant before us.
2. Shri Saurabh Dixit, Learned Counsel appearing on behalf of the ap-
pellant submits that during the entire period of renting, the right to use of ISO
tank and effective control was with the appellant. ISO tank is operated by the
appellant’s own labour. The repair and maintenance as and when required is
also carried out by the appellant themselves. Therefore, during the renting peri-
od, there is no interference or involvement of the lessor of the ISO tank who are
located outside the country. Therefore, the renting of ISO tank does not fall un-
der the category of “supply of tangible goods service”. In support, he placed reli-
ance on the following judgments :
(1) M/s. G.S. Lamba & Sons - 2015 (324) E.L.T. 316 (A.P.)
(2) GIMMCO Ltd. - 2017 (48) S.T.R. 476 (Tri. - Mum.)
(3) Aims Pharma Ltd. - 2019 (5) TMI 2400-CESTAT (Ahm.)
3. Shri Ghanshyam Soni, Learned Joint Commissioner (Authorised
Representative) appearing on behalf of the Revenue reiterates the finding on the
impugned order.
4. We have heard both sides and perused the records. We find that the
appellant have referred to a contract under which ISO tank was hired by them on
lease from foreign supplier. We find that the Adjudicating Authority as well as
the appellate authority has held that the renting of ISO tank falls under the cate-
gory 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, we find 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. With these facts, it prima
facie appears that the right to use and effective control was with appellant. How-
ever, 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, in our con-
sidered view, the matter needs to be reconsidered carefully by the Adjudicating
Authority. We also find that the Adjudicating Authority has contended that since
there is no payment of VAT, the transaction is not a deemed sale. However, we
are of the view that there may be cases where even though there is a deemed
sale, but the particular transaction may not attract sales tax/VAT. Therefore,
even if the VAT payment is not there, only on that basis it cannot be said that it is
not a deemed sale. This aspect also needs to be considered. The appellant also
relied upon various judgments on the issue in hand. The Adjudicating Authority
must carefully consider these judgments taking into account the fact of that case
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