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2016 (3) TMI 354 - SUPREME COURT

2016 (3) TMI 354 - SUPREME COURT - 2016 (42) S.T.R. 418 (SC) - Business auxiliary service - services provided by the Banks for collection of telephone bills, collection of insurance premium on behalf of the client companies - Held that:- Clause (12) of Section 65 covers all charging services rendered by the Banks. - when cash management services stood excluded from the purview of service tax at the hands of the Bank until 31.05.2007, the authorities cannot levy service tax on an activity which i .....

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Civil Appeal No(s).7053/2011 With C.A. No. 7054/2011 To C.A. No. 7058-7060/2011, C.A. No. 7061/2011, SLP(C) No. 36974/2012 & C.A. No. 613/2013 - Dated:- 18-2-2016 - MR. SHIVA KIRTI SINGH AND MRS. R. BANUMATHI, JJ For the Petitioner : Mr. K. Radhakrishna, Sr. Adv., Mr. Rajiv Nanda, Adv., Ms. Rashmi Malhotra, Adv., Mr. B. Krishna Prasad, AOR And Ms. Shweta Garg, Adv. For the Respondent : Mr. M. P. Vinod, AOR, Mr. Atul Shankar Vinod, Adv., Mr. Kunal Verma, AOR, Ms. Yugandhara Jha, Adv., Prasanna Mo .....

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he appeal has been dismissed. The other connected matters have also been decided on the basis of ratio laid down in the aforesaid judgment under appeal. The moot question of law falling for determination is whether the services provided by the respondent - Bank such as collection of telephone bills, collection of insurance premium on behalf of the client companies are liable to service tax under the category business auxiliary service as defined under Section 65(19) of the Finance Act, 1994 (her .....

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y service . Since the meaning and significance of cash management service , the term not defined under the Act, was not very clear, the High Court has taken note of clarification contained in the Circular issued by the Central Board of Excise and Customs (CBEC) dated 01.06.2007. The relevant part of that clarification letter is as follows: At present cash management is specifically excluded from the scope of this service. Specific exclusion of cash management is being omitted. Consequently, cash .....

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s appears to be an extract from the Research Journal of Management Sciences, Vol.3(12), 15-17, December (2014). A perusal of the write-ups supports the concept and meaning of cash management services appearing in the clarification letter of the CBEC dated 01.06.2007. It is not in dispute that under Clause (12) of Section 65, there was a specific mention in sub-clause (v) to the effect that the banking and other financial services means asset management including portfolio management, all forms o .....

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hereafter held that sub-clause (vii) of Clause (19) refers to only a service which is incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), but those activities in turn do not specifically relate to banking and other financial services. Rather such banking and other financial services are specifically covered by clause (12) of Section 65. In that view of the matter, the High Court held that Clause (12) of Section 65 covers all charging services rendered by the Banks. The .....

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