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2015 (9) TMI 1036 - CESTAT MUMBAIClassification - sale of savings bonds issued by RBI - assessee bank rendered custodial service by maintaining the Bond Ledger Account and services incidental thereto - Banking and other financial services - Business Auxiliary service - "cum-tax" value has been adopted for determining the value of the taxable service - Held that:- It is clear that custodial services in relation to securities is primarily the safekeeping of the securities of a client; the secondary function is that of providing services incidental thereto - a few of such services are included in the definition. Sans client- custodian relationship and sans entrusting of securities for safekeeping, the incidental services are not relevant. Once a client has entrusted the safekeeping of securities to a custodian, the custodian may maintain accounts relating to the security and collect the benefits accruing to the client as incidental activities. Without such entrustment the relationship is not one of custodianship. There is no client-beneficiary relationship with the bond-subscriber. Without rendering of custodian services, it would not be correct to hold that the appellant is liable to service tax for the consideration received from the Reserve Bank of India as handling commission, turnover commission and service charge in the category of "banking or other financial service". - The claim of the assessee to be taxed as provider of "business auxiliary service is upheld. There being no differential tax to be collected, the departmental appeal on valuation and penalty is dismissed - Decided against Revenue.
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