TMI Blog2013 (8) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... ied 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. (2008 (7) TMI 29 - CESTAT, AHMEDABAD) in a similar situation where extrusion material was given on lease to Jain Irrigation, the Tribunal after looking into the terms and conditions of the agreement which are similar to the present agreement, set aside the demand. - impugned order is set aside - Decid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand is for the period January 2004 to September 2005 and as per the provisions of the Finance Act, banking and other financial services are the services provided by a banking company or a financial institution including a non-banking financial company or any other body corporate. The appellants are engaged in the manufacture of industrial gases hence it cannot be said that the appellants are a banking company or other financial institution. The appellants relied upon the Board Circular dated 9-7-2001 whereby the Board has clarified in respect of the banking and financial services. The appellants relied upon the decision of the Tribunal in the case of CCE, Vadodara-I v. G.E. India, Industries (P) Ltd. reported in 2008 (12) S.T.R. 609 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial services 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 including equipment leasing and hire-purchase by a body corporate. (ii) ...... (iii) ...... (vi) ...... (b) foreign exchange broking provided by a foreign exchange broker other than section those covered under sub-clause (a) Section 65(4) body corporate has the meaning assigned to it in Clause (7) of Section 2 of the Companies Act, 1956 (1 of 1956). Section 65(105)(zm) Taxable service means any service provided or to be provided to a customer, by a banking company or a financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ownership of the assets on lease is transferred to lessee by the end of the lease term and this opinion is created at the inception of the lease itself. In the instant case, the agreement is only for the period of 35 months during which a monthly user charge is required to be paid and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lessor/hire purchase service provider. The interest/finance charges is the Revenue or income and is credited to the Revenue account. Such interest or finance charges together with the lease management fee/processing fee/documentation charges is the consideration for 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/documenta-tion charges (recovered at the time of entering into the agreement) and on the finance/interest charges (recovered in equated monthly installments) and not on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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