2015 (3) TMI 788 - AT - Service Tax

Banking and other financial services - Held that - There appears no difference at all in the facts what that was covered by the cited decision to hold that present case is a different case. Therefore, the authority misconceiving the appellant to be financial company to tax the appellant does not arise - The facts in dispute are similar in appeals as at Sl.No.75 to 78 of the cause list. But so far as appeal No.ST/711/2010 listed in Sl.No.79 of the cause list, it is brought to our notice by learned counsel that vending machine supplied by the appellant were subjected to rental and that rent was also taxed under the aforesaid taxing provision. Principally when the appellant does not come within the purview of other financial service provider, there shall be no liability also in this appeal - Decided in favour of assessee.

Summary

Issues: Taxability of rentals for leasing crates and bottles under the Finance Act, 1944.

Analysis:
The appellant argued that the rent charged for crates and bottles carrying soft drinks does not fall under the definition of "banking and other financial services" as per section 65(11) of the Finance Act, 1944. They emphasized a previous tribunal decision that elaborately discussed the non-taxability of such rent. The appellant maintained that they were not engaged in any banking or financial services, hence should not be taxed under section 65(105)(zm) of the Act. The tribunal agreed, stating that the appellant did not provide financial services, and therefore, should not be taxed under the Act.

Revenue contended that the leasing of crates and bottles by the appellant should be taxable under the Finance Act, 1944. However, after hearing both sides and reviewing relevant citations, the tribunal found no difference in the facts compared to the previous decision cited by the appellant. The tribunal emphasized that the appellant was not a financial company providing leasing services, thus ruling out any tax liability under the Act.

The tribunal referred to specific sections of the Finance Act, 1994, to analyze the definition of financial services and the taxability of leasing services. They highlighted that the appellant, being a public limited company, did not engage in lease finance, which was a prerequisite for tax liability under the Act. Additionally, the tribunal pointed out that the legislation broadened the tax base for tangible goods but found no legal basis to tax the appellant for the transfer of right to use movables before a certain date. Consequently, the tribunal concluded that the appellant was excluded from the purview of the law regarding taxation on rentals for leasing crates and bottles.

In a related appeal concerning vending machines supplied by the appellant, the tribunal noted that the rent for the vending machines was also taxed under the same provision. However, since the appellant did not fall under the category of financial service providers, the tribunal ruled in favor of the appellant, allowing all five appeals related to the taxability of rentals for leasing crates, bottles, and vending machines under the Finance Act, 1944.