Pepsico India Holdings Pvt. Ltd vs Commissioner Of Central Excise

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI

Appeal No.ST/193/2006 [Arising out of Order-in-Original No.3/2006 dt.2.6.2006 passed by the Commissioner of Central Excise, Pondicherry]

Appeal No.ST/15/2007 [Arising out of Order-in-Original No.4/2006(C-ST) dt.26.10.2006 passed by the Commissioner of Central Excise, Pondicherry ]

Appeal No.ST/188/2007 [Arising out of Order-in-Appeal No.67/2007(P-ST) dt.27.4.2007 passed by the Commissioner of Central Excise (Appeals), Chennai]

Appeal No.ST/710/2010 [Arising out of Order-in-Appeal No.135/2010(P-ST) dt.30.7.2010 passed by the Commissioner of Central Excise (Appeals), Chennai]

Appeal No.ST/711/2010 [Arising out of Order-in-Appeal No.134/2010(P-ST) dt.30.7.2010 passed by the Commissioner of Central Excise (Appeals), Chennai]

Pepsico India Holdings Pvt. Ltd. Appellant

Versus

Commissioner of Central Excise, Pondicherry Respondent

Appearance:

Shri Raghavan Ramabadran, Advocate Shri B.L.Narasimhan, Advocate For the Appellant

Shri B. Balamurugan, AC (AR) For the Respondent

CORAM :

Honble Shri D.N. Panda, Judicial Member Honble Shri R. Periasami, Technical Member

Date of Hearing/Decision : 28.1.2015

FINAL ORDER No.40075-40079/2015

Per D.N. Panda

It is explained on behalf of the appellant that crates and bottlers which carry the soft drinks are subjected to charge of rent by the appellant without being a financial company. It does not satisfy the requirement of definition of "banking and other financial services" as defined by section 65 (11) of the Finance Act,1944 to bring the appellant under the ambit of section 65 (105) (zm) of the said Act. He further explains that appellant company has neither been engaged any banking or financial services for which the Tribunal in the case of Banswara Syntex Vs CCE Jaipur  2010 (18) STR 68 (Tri.-Del.) has elaborately dealt the non-taxability of the nature of rent received by the appellant. Ld. Advocate emphasizes that in para 6 & 7 of the said decision, the law was elaborately dealt by the Tribunal. Therefore, the entire adjudication being misconceived there shall be no liability of the appellant.

2. Revenue contends that there is leasing of crates and bottles made by the appellant for which rentals there from shall be taxable under the Finance Act, 1944.

3. Heard both sides and also perused the citations made by the appellant to test the facts of the case in the light of the above said order. There appears no difference at all in the facts what that was covered by the cited decision to hold that present case is a different case. Therefore, the authority misconceiving the appellant to be financial company to tax the appellant does not arise. For convenience of reading para 6 to 8 of the above judgement is reproduced below :-

"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 services including equipment leasing and hire-purchase. These provisions were examined by us. We notice that meaning of the term body corporate adopted from Companies Act brings the appellant to the fold of law, being a public limited company. But what is required to be examined is whether such a limited company has provided financial services.

7.?The facts on record suggest that Banswara Syntex Ltd. is not engaged in leasing business to be called a corporate body providing financial service. Finding the present appellant not engaged in lease finance, bringing the appellant to the fold of tax under Section 65(12)(zm) of the Finance Act, 1994 is unwarranted. We get support to say so, when we read the decision of the Tribunal in the case of CCE, Vadodara v. G.E. India Industries (P) Ltd. reported in 2008 (12) S.T.R. 609. So also when we read the letter dated 9-7-2001 issued by the TRU of the CBEC vide No. BII/I/2000-TRU, it is made clear that a company falling under the definition of body corporate should either be a banking company or a financial institution or a non-banking financial company which came under the purview of law. Such essential ingredient is absent in the present case.

8.?In the course of hearing, it was noticed that the Legislature intended to broaden the tax base bringing transfer of right to use tangible goods to the fold of law. This is appearing in Section 65(105)(zzzzi) of Finance Act, 1994 which came into force w.e.f. 16-5-2008. Finding that there was no law to tax the transfer of right to use movables before 16-5-2008, even on such count also, the appellant is excluded from the purview of law."

The facts in dispute are similar in appeals as at Sl.No.75 to 78 of the cause list. But so far as appeal No.ST/711/2010 listed in Sl.No.79 of the cause list, it is brought to our notice by learned counsel that vending machine supplied by the appellant were subjected to rental and that rent was also taxed under the aforesaid taxing provision. Principally when the appellant does not come within the purview of other financial service provider, there shall be no liability also in this appeal.

4. Accordingly, all the five appeals are allowed.

(Dictated and pronounced in open court)

(R. PERIASAMI) (D.N. PANDA) TECHNICAL MEMBER JUDICIAL MEMBER

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