RITES LIMITED Vs. COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX

JUDGEMENT

(1.) THIS is an application by a Public Sector Undertaking under the Ministry of Railways under Section 96 C of Chapter v. of the Finance Act, 1994. According to the applicant, it provides consultancy services in various facets of transportation like Railways, Highways, Airports, Urban transport, Ropeways etc. in India and abroad. It also provides services of third party inspection, project management and construction supervision. Since it is in the business of providing consultancy services it is being approached for the leasing of locomotives, coaches and wagons in India. It is also exporting and leasing locomotives and rolling stock abroad.

(2.) IT has approached this Authority for Advance Ruling on the question sought to be raised by it since it proposes to enter into a new business and wants to seek a ruling regarding its liability to pay service tax, if any, on that business. Since there is serious objection on the part of the Commissioner of Service Tax, on the ground that the claim is vague, we set out the activity proposed to be undertaken by the applicant as disclosed in its application.

(3.) WHILE admitting the application for ruling, this Authority formulated the above questions. We may observe that at the hearing, no claim was raised by the applicant regarding question Nos. (ii), (iii) and (iv) and it was acknowledged that a contract for repair and maintenance would attract service -tax, going by the definition of taxable service in Clauses (105)(zzg) or (105)(zzzzj) of Section 65 of the Act. The only ruling that was really sought for was regarding the first question as to whether it was eligible to service -tax if it undertakes the activity of operating on dry lease of its locomotives, coaches and wagons etc. The department mainly relied on Clause (105)(zm) of Section 65 read with the definition of the banking and financial services in Clause (12) of the said Section of the Act to meet the claim and the arguments surrounded the interpretation of that provision.