NATIONAL OXYGEN LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellants are manufacturers of oxygen and nitrogen (both in gaseous and liquid forms). These chemicals are cleared from factory in cryogenic tankers. The appellants are possessed of such tankers which, when not required for their purpose, are lease out to other parties. During 2002 -03 and 2003 -04, they had leased out some of their cryogenic tankers to other parties. This service was sought to be brought out within the ambit of "banking and other financial services" defined under Section 65(11) of the Finance Act, 1994 and accordingly show -cause notice dated 23.06.2006 was issued to the appellants for recovery of Service Tax of Rs. 5,43,000/ - from them and for imposing penalties on them. The original authority dropped these proposals. The revisional authority (Commissioner) revised the decision of the lower authority and demanded the above tax from the appellants and imposed on them the above penalties.

(2.) IT is submitted by learned Counsel that the above service was not taxable as "banking and other financial services" inasmuch as it was purely in the nature of lease by a non -banking and non -financial company. On the other hand, learned SDR submits that the appellants would come within the scope of "body corporate" and the above service would fall squarely within the ambit of "equipment leasing" and, therefore, the above demand of service tax requires to be sustained. In this connection, reliance is placed on Stay Order No. 1087 -1088/2006 dated 07.11.2006 passed by the Division Bench in Appeal Nos. S/147 & 148/2006. Learned Counsel seeks to distinguish the case discussed in the said stay order.

(3.) THERE will be waiver of predeposit and stay of recovery in respect of the amounts of tax and penalties.