9911796707
TMI Blog2014 (7) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... irmed service tax demand of Rs. 3,10,448/- out of a proposed demand of Rs. 36,46,06,584/- and ordered recovery of this amount alongwith interest under Section 75 and penalties under Sections 75A, 76, 77 and 78 of the Finance Act, 1994, for having provided taxable services. 2. In the show cause notice the appellant was alleged to have provided 'Real Estate Agent' service; 'Banking and other Financial Services' and 'Technical Testing and Analysis/ Technical Inspection and Certification' Services. The adjudicating authority dropped the demand in so far as it pertained to 'Real Estate Agent' service, being the substantive component of the proposed demand. 3. On 'Technical Testing and Analysis/ Technical Inspection and Certification' Services, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of the Companies Act, 1956 with 100% shareholding by that Government (and engaged as its name and Memorandum of Association and Articles of Association suggest), to function as an agency and instrumentality of the State to provide and augment industrial development and investment in the State. 6. The show cause notice, the response of the appellant there to; and the adjudication order (para 16) reveal that appellant, on directions of the State Government raises loans on the strength of Bonds issued by it. Amounts so raised are required, under directions of the State Government, to be placed in an interest bearing Public Deposit (PD) account of the appellant. These funds are to be deployed in accordance with directions issued by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised is to be deployed by the appellant as per directions of the State Government. On these premises the Authority concluded that the appellant had provided auxiliary financial services and fund management services to the State Government, received remuneration under the title of 'administrative expenses' and therefore 'administrative expenses' is consideration received for providing the taxable 'Banking and other financial service'. 10. On a careful consideration of the activities of the appellant on the basis of the material on record, it is apparent that the appellant, an instrumentality of the State raises loans from the public in its own name by issuing Bonds. The amounts so received are kept in a P.D. account of the appellant. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legedly provided by the appellant to the State Government, under sub clause (vi). This sub-clause reads: advisory and other auxiliary financial services including investment and portfolio research and advice, advice on mergers and acquisitions and advice on corporate restructuring and strategy. On application of ejusdem generis or the noscistur a socii principles, applicable to multi component definitions as set out in sub-clause (vi), it appears to us that the scope of 'Banking and other Financial Services', as enumerated in sub-clause (vi) cannot be extended beyond the associational components specifically listed in the sub-clause. The inference by the learned Commissioner that the appellant had provided advisory and other auxiliary finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid analyses, the demand for Rs. 2,74,078/- confirmed by learned Commissioner on the ground that the appellant had provided 'Banking or other Financial Services', cannot be sustained and is accordingly quashed. 15. In the result, the appeal is partly allowed confirming the demand of service tax to the extent of Rs. 36,370/- alongwith proportionate interest. In so far as the penalty leviable on the under remittance of the now confirmed tax of Rs. 36,370/-, we hold that in the totality of the facts and circumstances and given that the appellant is an instrumentality of the State and has deposited the entire confirmed Service Tax Demand of Rs. 3,10,448/- and the penalties confirmed under Sections 75A, 77 and 78 apart from the interest com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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