2005 (4) TMI 364 - AT - Central Excise

Summary

Issues:
Levy of Service Tax on the activity of transfer of money by appellants known as 'Angadia.'

Analysis:
The appeals revolve around the levy of Service Tax on the transfer of money by the appellants, known as 'Angadia.' The advocates for the appellants acknowledged that their clients provide services for transporting valuable documents like diamond packets, gold, and silver articles between branches, offering door-to-door services as well. The advocates did not contest the registration or payment of Service Tax on remunerations for these services. However, the appellants disputed the Service Tax imposed on commissions retained for the transfer of money. The facility in question allowed clients to deposit Indian currency at any branch, pay a commission, and have the amount delivered to a named recipient at another branch in the same city or elsewhere.

Upon examining the levy of Service Tax under Section 65(33) of the Act defining a 'courier agency,' it was noted that the definition requires the service provider to be a 'commercial concern' engaged in door-to-door transportation of time-sensitive documents, goods, or articles through natural persons directly or indirectly. While the appellants were considered a courier agency for transporting documents and valuable items, the transmission of Indian currency did not qualify for Service Tax for two main reasons. Firstly, there was no physical transportation of the currency itself; only instructions were transmitted for payments. Secondly, incidents of cash looting did not involve client-deposited cash but rather the company's funds being transported between branches.

The judgment clarified that the transmission of instructions for paying Indian currency did not fall under the definition of a courier agency subject to Service Tax. The absence of statutory definitions for 'documents,' 'goods,' or 'articles' led to a reliance on common interpretations, which excluded Indian currency as a sensitive document or good. Therefore, the transmission and compensatory payment involving Indian currency were not deemed taxable under the 'courier agency' heading. However, if actual currency notes deposited by a client were physically transported between branches for delivery, then the Service Tax levy would apply.

Consequently, the appeals were allowed concerning the levy of Service Tax on inter-branch transmission of Indian currency, while the tax on transporting other sensitive documents, goods, and articles was upheld. The judgment clarified the distinction between taxable and non-taxable scenarios based on the physical transportation of client-deposited currency notes.