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2014 (7) TMI 621 - AT - Service TaxScope of the Banking and Financial services - activity of managing funds on its own account or on behalf of state government - nature of amount reimbursed by the state government - whether taxable - Held that:- The appellant is raising funds by way of loans on issue of Bonds in its own name, which cannot be considered as managing the funds of the State Government. The fact that the State Government guarantees repayment of loans by the appellant (under Bonds issued by it) would not amount to issue of the Bonds by the State Government. The discipline of Article 266 mandates that all loans raised by a State Government shall form one consolidated fund to be called the Consolidated Fund of that State. If that be the reality of the transaction, the expenditure incurred by the appellant would be expenditure incurred for servicing its own activity, of raising funds for its purposes though reimbursed by the State Government, to the extent of the incurred administrative expenses. Such reimbursement, in our view would not amount to payment of consideration for rendition of the tanable service, by the appellant to that Government. - Decided in favor of assessee. However, demand of ₹ 36370/- on ‘Technical Testing and Analysis/ Technical Inspection and Certification’ Services confirmed with interest - penalty waived u/s 80 - Decided partly in favor of assessee.
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