Service Tax
TRT-2025-
Cestat New Delhi
Date:-03-01-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 03 January 2023
Facts –
- The Appellant, M/s SRF Ltd. during the period 16.05.2008 to 30.06.2012, entered into contracts with foreign suppliers for obtaining ISO tankers on lease/ rental basis, which were used by the appellant for transportation of refrigerant gases via sea route.
- A show cause notice dated 29.05.2013 was issued to the appellant alleging that the appellant had received services in the nature of STGU from the foreign suppliers, which would be taxable under section 65(105)(zzzzj) of the Finance Act, 1994 and leviable to service tax at the hand of the appellant in terms of section 66A of the Finance Act read with rule 2(1)(d)(iv) of the Service Tax Rules, 1994 and rule 3(iii)(c) of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006.
Issue –
- Whether the supply ISO Tankers on lease to the appellant by foreign suppliers would amount to STGU service?
Order –
- The Tribunal held that the transaction between the appellant and the foreign buyer would qualify as a transfer of right to use goods with the control and possession over the ISO Tanker passing on to the appellant.
- It was observed that whether there is a transfer of right to use or not is a question of fact which has to be determined in each case having regard to the terms of the contract under which there is transfer of right to use.
- Thus the supply of ISO Tankers on lease/rental basis by foreign suppliers to the appellant would amount to a deemed sale under article 366 (29A) of Constitution as the appellant throughout had effective control and possession over the ISO Tankers.
- Hence the impugned order is set aside and appeal is allowed.
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