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TMI Blog2012 (8) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... he asset on expiry of the lease agreement – Held that:- As a lot of factual verification was not done, expert consultation was not made any total demand has been drastically curtailed without adequate verification or analysis, the entire matter may be remanded for de novo adjudication - order set aside and matter remanded to the Original Authority - S.T. 160 & 188/09 - - - Dated:- 30-1-2012 - SHRI S.K. GAULE, DR. D.M. MISRA, JJ. Shri Ravi Raghavan, Advocate for the Appellant(s) Shri D.K.Acharyya, Spl. Counsel for the Revenue Per Shri S.K. Gaule. 1. Both Revenue as well as assessee have filed appeals against Ld.Commissioner s order No. 61/Commr/ST/Kol/2008-09 dated 31.03.2009. The assessee appellant/respondent is h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the asset and there is no clause in the agreement which say that their clients had the option to purchase the asset on expiry of the lease agreement. Hence the condition of meaning of financial lease is not satisfied. The condition is that the financial leasing agreements were entered by the applicant prior to 16.07.2007 and accordingly no Service Tax is payable by the applicant on the same in view of the Board s clarification issued vide letter No.B-II/I/2000/TRU dated 09.07.2001 wherein it has been clarified as under:- A question has been raised whether lease or hire purchase agreements entered into prior to the imposition of levy would be leviable to service tax. In this regard, it is clarified that such agreement entered into prior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) S.T.R. 150(Tri.- Bang.). Similarly, the operating lease is also not liable to Service Tax. The contention is that gain on securitization is not liable to Service Tax since it is an amount received for sale of assets. The contention is that the department could not produce any evidence that the quantification by them duly certified by the Chartered Accountant is wrong. Similarly the reliance placed on the information provided by RBI is not correct since the information furnished is in the Format prescribed by the RBI. The contention is that the applicant had not collected Rs.93,00,000/-(Rupees Ninety Three Lakhs only) and retained the same with them, the demand under Section 11D can be only up to maximum amount of Rs.7,54,689/-(Rupees Seve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s all risks and rewards incidental to ownership of an asset to the lesee though the title may or may not eventually be transferred. In the agreements relating to the so-called operating lease, the condition the user will be responsible for maintenance of the equipment and payment of taxes, and insurance is present whereas such a condition is stipulated in a financial lease and not an operative lease. (Both as per Apex Court judgment in Sundaram Finance Case in 1965 and definition of Financial lease under BFS, hire purchase said to be hire purchase finance is actually financial lease because all ingredients of the finance lease definition are present in the lease agreements). 3.3 The Ld.consultant for the department contended that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g physical assets. Their balance sheet would quickly in 3 to 4 years, shown decrease in gross block proportionately and structural change in the asset side. Has it been shown like that? There is no such analysis or finding. 3.4 Further in the Bajaj Auto Finance Case, Tribunal has essentially been guided by the Apex Court judgment in Sundaram Finance Vs. State of Kerala (1966) 17 STC 489 judgment which makes a distinction between hire purchase and hire purchase finance in the context of liability of Sales Tax. In para 11, the Hon ble Supreme Court observes that the class of hire purchase agreement must be distinguished from a transaction in which the customer is the owner of the goods and with a view to finance his purchase he enters into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be remanded for de novo adjudication. 4. We have carefully considered the submissions and perused the records. We find that the Department itself is questioning the legality and propriety of the impugned order. Therefore, it is expedient to set aside the impugned order and remand the matter to the Original Authority for a fresh decision, who shall take into account the grounds of the Appeals advanced by the Appellants (Assessees). We also find that this Tribunal has been taking a consistent view in such cases where the Department itself is questioning the legality and propriety of the impugned order and the Appellants (Assessees) are also in appeal. This Tribunal in the case of M/s.Singh Brothers Exim Pvt. Ltd. and Shri Anand Kumar S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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