2016 (12) TMI 796 - AT - Service Tax

Tribunal rules in favor of appellant, leasing Oxydeep unit not subject to service tax

Inox Air Products Ltd. Versus Commissioner of Central Excise

Inox Air Products Ltd. Versus Commissioner of Central Excise - TMI Issues:Whether the appellant is liable to service tax on lease rental for an Oxydeep unit of treatment of waste water during October 2004 to March 2008.Analysis:The appeal was against an Order-in-Appeal passed by the Commissioner of Central Excise & Customs (Appeals), Nagpur. The issue in question was whether the appellant should pay service tax on the amount received from their client as lease rental for an Oxydeep unit. The appellant's Counsel argued that a similar issue had been decided in their favor by the Bench for an earlier period. The first appellate authority relied on previous order-in-appeals while the Assistant Commissioner (AR) mentioned orders dated 23/01/2007 and 16/03/2007. The impugned order stated that the appellant's activity did not fall under financial services as they did not provide finance for the equipment and were not involved in financing. The appellant's claim was that their activity did not constitute financial services as per Board Circulars and should not be taxed. However, the first appellate authority found that equipment leasing falls under operating lease, a sub-head of financial leasing, as per Rule AS 19 issued by the Institute of Chartered Accountants of India.The Tribunal noted that similar issues had been decided in favor of the appellant in previous appeals. The Tribunal found no reason to deviate from the view taken in those appeals. Therefore, the impugned order was set aside, and the appeal was allowed with any consequential relief. The judgment was pronounced on 02/12/16 by Member (Judicial) Mr. M.V. Ravindran.