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Bank of Baroda Versus Commissioner of Service Tax, Mumbai

2015 (10) TMI 2464 - CESTAT MUMBAI

Liability of Service Tax Whether Setting up MICR-CPC to attend cheque clearance of Financial Institutions is Banking and Other Financial Services or not? Appellant contended that as per definition Banking and Other Financial Services, there has to be a client or customer, which is absent herein - Cheque clearance activity rendered to other member Banks and not to customers There was a bonafide conduct and no intention to evade tax Revenue contends that liability of interest arises whethe .....

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one year - Appellant is not liable to discharge any interest on amount of service tax liability paid, appeal to that extent is allowed Decision made in case of Gujarat Narmada Fertilizers Co. Ltd [2012 (4) TMI 309 - GUJARAT HIGH COURT] followed Decided partially in favour of assessee. - Appeal No. ST/356/11-Mum - Final Order No. A/3288/2015-WZB/STB - Dated:- 21-9-2015 - M. V. Ravindran, Member (J) And C J Mathew, Member (T) For the Petitioner : Shri S. S. Gupta, CA For the Respondent : Shr .....

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Services. The DGCEI after collecting the details of MICR-CPCs operated by various banks from Reserve Bank of India, followed up with the appellant for the details of the amounts collected by them when they conducted the business of cheque processing. After recording various statements, the authorities came to a conclusion that appellant is liable to discharge service tax liability on the amounts collected by them on MICR cheque processing charges during the period 16.07.2001 to 28.02.2005; duri .....

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service tax with interest; dropped the proceedings initiated for imposition of penalties. 3. Learned Chartered Accountant would submit that the definition of Banking and Other Financial Services is not applicable in the case in hand as appellant is charging One Rupee per cheque for executing the cheque processing of various Banks and Financial Institutions. He would submit that on reading the definition Banking and Other Financial Services, there has to be a client or customer, which in the case .....

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d it was informed by letter dated 25.02.2008, that the ministry of Law and justice was consulted, after due deliberation it was clarified that the activities under taken and the charges collected by the appellant from members bank was squarely covered under Banking and Other Financial Services. He would submit that there was no intention to evade the service tax and hence the interest, as has been charged by the adjudicating authority needs to be set aside, he relies on the judgment of Hon'b .....

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ings of the adjudicating authority, he would submit that the liability of interest arises irrespective of whether there is intention to evade tax or otherwise. 5. We have considered the submissions made at length of by both sides and perused the records. 6. On perusal of records, we find that the issue involved in this case is regarding the taxability of the services rendered by the appellant as to clearing of cheques of member banks and collecting charges for the same and whether this is covere .....

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th interest during the proceedings. 8. It is seen from the records that the appellant is not seriously contesting the service tax liability. The clarification issued by CBEC vide letter dated 25.02.2005 will indicate that the amount collected by the appellant as charges for clearing cheques or clearing house, under the category of Banking and Other Financial Services. To that extent the appellant's appeal fails on merits. On limitation also we find that the appellant could have contested the .....

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for the recovery of interest claiming that having discharged duty, interest liability arises. Tribunal set aside the impugned order before it, holding that if the assessee would have contested the matter on limitation, he would have succeeded and no duty liability would have arisen, holding so, set aside the interest liability. Aggrieved by such an order revenue preferred an appeal before Hon'ble High Court. Hon'ble High Court in their judgment at paragraph number 11, 12 and 13 held that .....

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ver the same under sub-Section (1) of Section 11A of the Act. In absence of any such voluntary payment, recovery of the unpaid duty would not have been possible. In that view of the matter, we do not find the case would fall under sub-Section (2B) of Section 11A of the Act. Sub-Section (2B) of Section 11A of the Act applies in a case where there is voluntary payment of unpaid duty before issuance of show cause notice under sub-Section (1) of Section 11A. When the provision refers to show cause n .....

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