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TMI Blog2010 (5) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded. On completion of the investigation, it appeared that the appellant had short paid the service tax in respect of the BOFS and that they had not discharged the service tax liability under the head Business Auxiliary Service (BAS) for Cash Management Service (CMS) and also for Management Consultancy Service (MCS). Show cause notice was issued. The appellant contested the show cause notice before the authorities and adjudicating authority after considering the representations made, came to the conclusion that the demands raised in the show cause notice are correct and hence confirmed the demands and imposed penalties under various sections and ordered for the interest. 3. Ld. Chartered Accountant appearing on behalf of the appellant would submit that- (a) As regards difference in valuation of the taxable service, he would submit that there is no difference in the value of taxable services, as can be noticed from re-conciliation of the amount demanded and confirmed by the authority. It is submitted that the authorities have confirmed the demand on the miscellaneous income which was shown in the balance sheet. It is his submission that miscellaneous income cannot be consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant would be considered as an income arising out of the BOFS as the appellant is a bank. Since, no evidence was provided before the adjudicating authority, the adjudicating authority was correct in confirming the demand. 5. After considering the submissions made at length by both sides and perusal of the records, we record our findings as under: (I) As regards the CMS, we find that the adjudicating authority has recorded the following findings:- "24 ............Cash management services are offered by Syndicate Bank to specific corporate customers who avail the services as per the agreement. This service is meant to manage the funds of specified clients, and the clients benefit by way of fasters, time bound and specific service and the instant transfer of funds at competitive rates etc. "Business auxiliary Services" was brought under the Service Tax net w.e.f. 1-7-2003 vide Notification No. 7/2003-ST., dated 20-6-2003. This included all along, procurement of goods or services, which are inputs (i.e. all goods or services intended for use by the client) for the client, and a service incidental or auxiliary to it such as billing, issue or collection or recovery of cheques, payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particularly under italic (iii). It cannot be independent of that category. Such an activity is not found in the present case. The definition of 'banking and other financial service' clearly indicate with regard to the asset management and also refers to the asset management in the category of italic (v) of the definition. It also refers to depository and trust services but does not include cash management. The appellants activity is in the category of cash management inasmuch as the clients are operating their accounts and cash flow of the client is coming to the clients account. Therefore, the activity is that of cash management which is excluded from 'banking and other financial services'. The appellants have made out a case that they are not covered under the category of 'customer case (sic) (care) service' in the main category of 'business auxiliary service' and hence their contention is required to be accepted." The above said decision has not been stayed by any higher court. The facts in that case and the facts in this case are similar and respectfully following the same, we hold that the service tax liability on the appellant under the head BAS for CMS rendered is unsusta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services, for the periods where such liability arose on them. It can be seen that there is no dispute that the services which are rendered by an appointment of Manager in the exchange at Qatar and Oman. This undisputed point would indicate that the services rendered by such person as an appointee of the appellant was required to render services outside the territorial waters of India. We find strong force in the contention raised by the Id. Chartered Accountant that Circular No. 36/4/2001, dated 8-10-2001 will squarely cover the issue in the appellants favour as the service tax liability in this case is prior to 10-5-2007. We reproduce the circular "Service Tax - Services provided outside the limits of Indian territorial waters not liable to tax Service Tax Circular No. 36/4/2001, dated 8-10-2001 F. No. 137/2/2000-CX. 4 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi I am directed to say that question has arisen whether services provided out side the limits of the Indian territorial waters are liable to Service Tax or not. The matter has been examined. At present the levy of service tax extends to the whole of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalties and interest arising out of such confirmed demand are also liable to be set aside. We set aside that portion of that order which confirmed the demand raised on the appellant under the category of MCS. (III) As regards the confirmation of the demand on the BOFS, we find basically the demand has been raised and confirmed by the lower authorities only on the findings that miscellaneous income which has been shown in the balance sheet of the appellant are nothing but arising out of the services, which are rendered by the appellant. On casual perusal of the re-conciliation statements which have been shown by the ld. Chartered Accountant, we find that these miscellaneous incomes may not be arising out of the services rendered by the appellant. Since this reconciliation statement was not produced before the authorities and is produced before us first time, we would not like to record any findings on the same and let the adjudicating authority to do so after verifying the records. In view of this, without expressing any opinion on the merits of this point, we set aside the impugned order to the extent it confirms the demands of service tax raised under the category of BOFS ..... 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