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2016 (9) TMI 1111 - CESTAT NEW DELHI

2016 (9) TMI 1111 - CESTAT NEW DELHI - TMI - Service tax liability - banking and financial service - income earned towards leasing out of certain machines - agreement was for providing lease/ right by the respondent to the third party for use of plant and machinery for a period of five years - ownership of the assets and effective control is with the respondent - Held that:- a lease is classified as financial lease if the lesser transfers the owner of the assets to the lessee by the end of lease .....

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company” or “financial institution” and / “non-banking finance company”. The principal objective of all these shall be financial dealings. An industrial concern is not covered by the scope of the definition. Reliance placed by the ld. Commissioner (Appeals) on the Board Circular dated 09.07.2001 and dt. 04.07.2006 is appropriate to apply the scope of other body corporate for service tax purpose under “banking and financial services”. Therefore, we find no reason to interfere with the impugned or .....

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f parts of motor vehicle. Upon scrutiny of the financial accounts of the respondent it was noticed that the respondent given some machines on lease and received some consideration on that. The Revenue entertained a view that the said consideration is liable to be taxed under the category of banking and financial service . Proceedings initiated against the respondent for recovery of service tax concluded by original order confirming the liability of ₹ 13,24,143/- against the respondent. Pen .....

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ry of banking and financial services . The relevant extracts of the definition of Banking and Financial Service under Section 65 of the Finance Act, 1994 are given below: Section 65(12) 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 including equipment leasing and hire-purchase by a body corporate; (ii) ......... .....

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orate or commercial concern, in relation to banking and other financial services . The case of the Revenue is that the respondent is a body corporate who had undertaken leasing of plant and machinery, equipments to third party. We note that the impugned order elaborately examined the scope of financial leasing in terms of Accounting Standards - 19 issued by ICAI. A lease is classified as financial lease if the lesser transfers the owner of the assets to the lessee by the end of lease term. The a .....

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