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TMI Blog2013 (10) TMI 1449X X X X Extracts X X X X X X X X Extracts X X X X ..... including land, etc., to certain other companies who are also in the field of sugar manufacture. The lease was for a specified period and the lease rent was also specified on per annum basis. The Revenue issued a show cause notice claiming that the said activities as services of leasing fall under banking and other financial services as per Section 65(12) of the Finance Act, 1994. The cases were adjudicated by the original authority who confirmed the demand. On appeals filed by the present respondents, the appeals were allowed by the Commissioner (Appeals). Against the said order of the Commissioner (Appeals), the Revenue is before us. 2. The main grounds of the appeal is that the activity is covered by the definition banking and oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Tri.-Ahmd.). In the said case, certain extrusion machines were leased by M/s. GE India Industries (P) Ltd. to M/s. Jain Irrigation, Jalgaon and they were receiving certain amount as user charges and the Revenue tried to cover the said activity under banking and other financial services In this context, the Tribunal observed as under :- 3. The relevant extracts of the definition of Banking and Financial Service under Section 65 of the Finance Act, 1994 are given below : Section 65(2) banking and financial service means - (a) the following services provided by a banking company or a financial institution including a non-banking financial company or any other body corporate, namely :- (i) Financial leasing services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d agreement does not provide for transfer of the assets at the end of the term. Further from the agreement it is also seen that all risks and rewards incidental to the ownership have also not been transferred and ownership of the asset and effective control of the assets remain with the applicant in this case. Further, lease is for a short period of 35 months extendable to another period of 2 years and has no relation to the economic life of the asset which is invariably a consideration in lease. Further, the Board in Circular B/II/I/2000/TRU, dated 9-7-2001 [reported in 2002 (51) RLTM 135], has clarified as follows : 2.1 Financial leasing including equipment leasing and hire-purchase : 2.1.1 ***** 2.1.2 In the case of leasing or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the service rendered and therefore, they constitute the value of taxable service and Service Tax is payable on this value. Accordingly, it is clarified that Service Tax in the case of financial leasing including equipment leasing and hire-purchase will be leviable only on the lease management fee/processing fee/documentation charges (recovered at the time of entering into the agreement) and on the finance/interest charges (recovered in equated monthly installments) and not on the principal amount. 6. We also find that situation exactly similar to the present case is covered in the Tribunal s decision in the case of Banswara Syntex v. CCE, Jaipur reported in 2009-TIOL-2214-CESTAT-DEL = 2010 (18) S.T.R. 68 (Tri.-Del.). The assessee in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls) in appellant s own case No. Appl/JPR-II/ST/CH/140/X/2007/ 1152, dated 3-12-2008. Therefore, he prays that appeal may be allowed. 4. Learned DR Shri Vijay Kumar submits that the leasing of the equipment and factory shall be falling under the category of Banking and other Financial Services for which the Board has already issued clarification. According to the Board s clarification in letter F. No. B.II/1/2000-TRU, dated 9-7-2001 not only Banking and Financial Institutions providing leasing services are brought to the tax ambit but equally body corporates carrying out such activities are also brought to the purview of law. According to the meaning of body corporate, a public limited company shall also be falling under the defined categ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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