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TMI Blog2013 (11) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... g industrial gases to their various customers. At the request of certain customers, the appellants are also supplying vacuum insulated storage tanks on lease basis. The appellants entered into contracts with their customers in respect of the storage tanks. According to the terms and conditions of the agreement, the appellants are charging a fixed amount per month as a consideration amount for lease of the equipments for three years. The Revenue issued show cause notices demanding service tax on the ground that the appellants are providing banking and other financial services which are taxable as per the provisions of Section 65(12) read with Section 65(105)(zm) of the Finance Act, 1994. The adjudicating authority confirmed the demand. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her financial services. 6. We have gone through the terms and conditions of the agreement. As per the agreement, the vacuum insulated storage tank was supplied to their customers for a fixed term, i.e. for three years, and the appellants are charging Rs.27,500/- per month. As per the agreement, the property, i.e. tank, always remains the property of the appellants and the same was only loaned for use to their customers. The customers are not entitled to sell or offer for sale, mortgage and pledge the tanks. 7. The Revenue wants to classify the activity undertaken by the appellants under he banking and other financial services as provided under Section 65 (12) of the Finance Act. For ready reference, the relevant portion of Section 65 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al concern in relation to banking and other financial services and includes equipment leasing and hire-purchase by a body corporate." 8. Further, we find that the Board by the circular relied upon by the appellants, clarified in respect of the activity covered under banking and financial services. As the appellants are not a banking company or a financial institution including a non-banking financial company or any other body corporate or commercial concern in relation to banking and other financial services, therefore we find merit in the contention of the appellants in this regard. Further, we find that the Tribunal in the case of G.E. India, Industries Ltd. (supra) in a similar situation where extrusion material was given on lease to Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, it is understood that the general business practice is as follows: The service provider enters into a leasing or hire-purchase agreement with the lessee or hire-purchaser. At the time of entering into the agreement, they collect a charge called lease management fee or processing fee or documentation charges or by any other name, which is usually a percentage of the transaction value. The lease rental or hire purchase amount is recovered in equated monthly installments (EMI) over the period of lease or hire-purchases as indicated in the agreement through post dated cheques and no separate bills are raised for the monthly recovery. Every agreement bears a unique number. 2.1.3 The EMIs consist of recovery of prin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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