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TMI Blog2017 (2) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... ory of Banking & Other Financial Services . Appellant contested the show-cause notices on merits as well as on limitation. Adjudicating authority did not agree with the contentions raised and confirmed the demand with interest and also imposed penalties. 3. Learned C.A. would submit that the definition of Banking & Other Financial Services under Section 65(12) provides that the services shall be provided by the banking company or a financial institution including a non-banking financial company. It is his submission that the appellant is none of them and is a manufacturing company and manufacture paints. He would read Circular No. 83/1/2006-ST dated 4.7.2006 dated wherein the CBEC has classified that service tax is not payable by the company under the category of Banking & Other Financial Services . He would submit that similar issue came up before the Tribunal in the following cases - (a) Banswara Syntex 2010 (18) STR 68 (Tri. Del) (b) Vidharba Iron & Steel Corpn. Ltd. 2014 (36) STR 324 (Tri. Mum) (c) Inox Air Products Ltd. 2015 (38) STR 191 (Tri Mum) (d) Commissioner of Central Excise v. G.E. India Inds. (P) Ltd. 2008 (12) STR 609 (Tri.). (e) Mega Enterprises 2015 (40) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... body corporate; (ii) credit card services; (iii) merchant banking services; (iv) securities and foreign exchange (forex) broking; (v) asset management including portfolio management, all forms of fund management, pension fund management, custodial, depository and trust services, but does not include cash management (vi) advisory and other auxiliary financial services including investment and portfolio research and advice, advice on mergers and acquisitions and advice on corporate restructuring and strategy; and (vii) provision and transfer of information and data processing; (b) foreign exchange broking provided by a foreign exchange broker other than those covered under sub-clause (a); Section 65 (12) (August 2006) (12) banking and other financial services means (a) the following services provided by a banking company or a institution including a non-banking financial company or any other body corporate namely : (i) financial leasing services including equipment leasing and hire-purchase; (ii) omitted (iii) merchant banking services; (iv) securities and foreign exchange (forex) broking; (v) asset management including portfolio management, all forms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a financial institution are liable to service tax under section 65(105)(zm) of the Finance Act, 1994. Department of Posts is not similar to a bank or a financial institution and hence does not fall within the category of any other similar service provider." 6.3 The Tribunal in the case of Banswara Syntex (supra) while considering a similar issue of whether leasing of land, building as well as machinery would fall under Banking and other Financial Services or otherwise, held that such amount received as lease rent would not be covered under Section 65 (105) of Banking and other Financial Services in the Finance Act, 1994. We reproduce the ratio in paragraphs 6, 7 and 8:- "6. There is no difficulty to understand that Section 65(105)(zm) has brought a banking company, a financial institutions including a non-banking financial company, a body corporate and commercial concern providing service in relation to banking and other financial services are liable to service tax on the value of taxable services. The meaning of the term other financial services is given by Section 65(12) of the Finance Act, 1994. One of the categories of service covered by such activity is financial leasing se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... G.E. India, Industries Ltd. (supra) 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. The Tribunal held as under :- "4. Since the Finance Act, 1994 does not define what is financial leasing, the Commissioner (Appeals) has relied upon the Accounting Standard published by ICAI. According to the accounting standards, the leasing is classified as a financial leasing if 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 ext ..... X X X X Extracts X X X X X X X X Extracts X X X X
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