2013 (6) TMI 643

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....engaged in rendering of Banking and financial services. The appellant had given a loan to Raje Vijay Singh Dafale Sahakari Sakhar Karkhana Limited and Tasgaon taluka Sahakari Sakhar Karkhana Ltd. Both of them defaulted in payment of their outstanding dues. Therefore, the appellant bank took possession of their factories' plant and machinery in terms of Section 13(4)(a) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 on 14/08/2006 and 30/08/2007 for the default of the loans. Thereafter, they leased out the factory of Raje Vijay Singh Dafale Sahakari Sakhar Karkhana Limited to Rajaram Bapu Patil SSK Ltd. and the factory of Tasgaon Taluka Sahkari Sakhar Karkhana Ltd. to Ganpati Jilha ....

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....g of immovable property. Since the loanees defaulted in repayment of the loans, under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Act, 2002 they took possession of the factories belonging to the loanees and leased them out to the lessees mentioned in the lease agreements for recovery of the outstanding amounts from the loanees. This action on the part of the bank cannot be construed as renting of immovable property per se but should be considered as recovery of outstanding loans. Therefore, the appellant cannot be saddled with service tax liability on account of renting of immovable property. The learned counsel further submits that, as regards the expenditure incurred by the lessees o....

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....ice tax liability thereon has been discharged by the concerned service provider or not. 5. We have carefully considered the submissions made by both the sides. Section 65(105)(zzzz) of the Finance Act,1994 reads as follows:    "taxable service means, any service provided or to be provided to any person, by any other person, by renting of immovable property or any other service in relation to such renting for use in the course of or, for furtherance of business or commerce." 5.1 There is no dispute in the instant case that the property rented out is an immovable property and the renting has been for use for the furtherance of business or commerce. From the rental agreements entered into by the appellant, a copy of which is avail....