MADRAS VANASPATI LTD. Vs. CCE

JUDGEMENT

(1.) AFTER examining the records and hearing both sides, I note that the lower authorities have demanded service tax of Rs. 1,02,000/ - under Section 73 of the Finance Act, 1994 from the appellants for the period 2004 -05, in the category of "banking and financial services" defined under Section 65(10) of the said Act. The authorities have also imposed penalties on the assessee under Sections 77 and 78 of the Act. The appellants are engaged in the manufacture of "Vanaspati". During the above period, they had leased out certain machinery to another party and collected rental. The above demand is on the gross amount so collected by the appellants. It is on the basis that "equipment leasing by a body corporate" is part of "banking and financial services" defined under Section 65(10). The appellants are contesting this demand on the strength of a circular of the Board as also orders of the Tribunal. In this connection, ld. consultant has relied on the following stay orders:

(2.) AFTER considering the submissions, I have found prima facie case for the appellants inasmuch as the expression "body corporate" has been interpreted in the aforecited orders of the Tribunal as coming within the purview of "non -banking financial company".

(3.) ADMITTEDLY , the appellants are not any non -banking financial company and, therefore, applying ejusdem generis principle, they are prima facie not covered by the expression "body corporate" used in the definition of "banking and financial services" in Section 65(10) of the Finance Act. In the result, there will be waiver of predeposit and stay of recovery in respect of the service tax and penalty amounts. (Dictated and pronounced in open court)