Ms. Jyoti Balasundaram, Vice President. - We have heard both sides on the appeal against the order of the Commissioner of Central Excise, Pune, by which he has confirmed service tax demand of Rs. 25,89,31,078 and education cess of Rs. 16,72,844 by holding that the appellants who were engaged in the business of hire purchase finance, were liable to service tax under section 65(10) of Chapter V of the Finance Act, 1994, which covers "banking and other financial services" which inter alia means "financial leasing services including equipment leasing and hire purchase by a body corporate", and penalty of equal amount under section 78, in addition to Rs. 200 per day during which failure to pay tax continues, and penalty of Rs. 1,000. The period of demand is 16-7-2001 to 31-3-2005.

2. The case of the department is that there is no difference between hire purchase which is admittedly covered under section 65(10), and hire purchase finance, as in both cases, the hirer enters into agreement with person who provides financial services to the hirer and in lieu of such services, the hirer pays certain amount as finance charges/hire purchase charges. We find on scrutiny of the agreement ent