2025-VIL-1947-CESTAT-CHD-ST
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SERVICE TAX CESTAT Cases

Service Tax - Transfer of right to use tangible goods, Business Exhibition Service - Revenue observed that the appellant has leased out machineries to other companies, and the effective control of the machinery was not transferred to the lessees - Whether the leasing of machineries by the appellant amounts to a taxable service of "Transfer of Right to Use Tangible Goods" – HELD – The agreement between the appellant and the lessees showed that the possession of the machinery had been transferred to the lessees, and the conditions regarding repair, loss, and damage were of a general nature and did not indicate that the right of effective control was not transferred. Unless both the conditions of transfer of right of possession and effective control are satisfied, the service cannot be said to be a supply of tangible goods. As the appellant had paid the applicable VAT on the deemed sale, the right of possession had been transferred, and the demand on this count cannot be sustained – The impugned order is set aside and the appeal is allowed - Whether the expenses incurred by the appellant on exhibitions held outside India are taxable under the "Business Exhibition Service" – HELD - The expenses related to the exhibition held outside India, including the purchase of material for display and ocean freight, were not exigible to service tax as the services were provided and received outside India. In terms of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, such services would have been taxable only if they were performed in India, which was not the case here - Whether the services availed by the appellant from foreign service providers for market research are taxable under the "Business Support Service" on a reverse charge basis – HELD - The services availed by the appellant from foreign service providers were for market research of their products in a particular country, and not about a particular customer, as alleged in the show cause notice. The Tribunal relied on the CBEC's clarification that Market Research Agency Services include research relating to the development of a market for a product, and such services rendered entirely outside India cannot be taxed in India by invoking RCM.
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