TMI Blog2016 (10) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... xable services provided to or by RBI either in India or under Reverse Charge Mechanism. In our view as the respondent assessee is an agent of RBI, exemption granted by notification No. 22/2006-ST, needs to be extended to respondent - if RBI is exempted from the service tax liability in respect of various services, its agent for doing such services also needs to be extended the same benefit. Assessee means a person liable to pay service tax and includes his agent. RBI a person liable to pay tax as an assessee but for exemption, will include their agents viz. Banks appointed under Section 45 of RBI Act, to execute functions of RBI. Decision in the case of M/s. Canara Bank Versus CST, Bangalore [2012 (6) TMI 274 - CESTAT, AHMEDABAD] relied upon where it was held that appellant is held to be eligible for exemption as an agent of RBI. Appeal dismissed - decided in favor of respondent. - Dr. Satish Chandra, President , Mr. M.V. Ravindran, Member (Judicial) And Mr. V. Padmanabhan, Member (Technical) Ms. Suchitra Sharma, Commr (AR) Shri Govind Dixit, D.R. Shri Amresh Jain, D.R. for appellant Shri SourabhGarg, C.A Ms. PriyankaBanga, C.S. Shri Malvinder Bhatia, Advocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Commr. Of Service Tax, Bangalore 2012-TIOL-790-CESTAT-AHM as to how a public sector bank can be an agent of RBI and even if they are agent, is the agent entitled to exemption which is confined to principle only. It is his submission that power to grant exemption from liability to tax is prerogative of the Govt. of India and exercising such powers, the Central Govt. has issued Notification No. 22/2006-S.T., for exempting the services provided to and by RBI. It is his further submission that reliance placed by the Bench in the case of Canara Bank (supra) on the judgement of the Apex Court in the case of State of Madras vs. Cement Allocation Coordinating Organisation (1971) 2SCSS/587 is not applicable as the specific provisions of Finance Act will prevail over the general observations made by the Apex Court in that case. 4.1 It is his further submission that the respondent herein i.e. State Bank of Patiala is not the same as RBI as RBI is not Banking Company as defined under the provisions to Section 65(11) of the Finance Act, 1994 as RBI is not constituted under the provisions of the Banking Regulation Act, 1949 nor under the Banking Companies (Acquisition and Transfer of Unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cords. 7. The issue that falls for consideration of this Larger Bench is whether the respondent herein is eligible for the benefit of exemption notification No. 22/2006-ST dated 31.05.2006. The respondent herein is a public sector/nationalized bank established under Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and as defined in the State Bank of India (Subsidiary Banks) Act, 1959 and is authorized to collect the taxes payable by the citizen of India to the Government of India. The respondent herein collects the taxes and remits to RBI, for which action, the RBI extends a percentage of amount collected as commission. It is the case of the Revenue that such commission is taxable in the hands of the respondent under the category of Banking and other Financial Services . 7.1 Judicial notice is being taken that the RBI is constituted under RBI Act, 1934, and is banker of the nation. As per Section 20 of the RBI Act, the RBI is mandated to accept the monies for the account of Government of India and to make payment and other activities like foreign exchange remittances and other banking operations including the management of debt of the Govt.of India. 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at all places, or at any place in India for such purposes as the Bank may specify. (2) When any bank is appointed by the Bank as its agent under sub-section (1) to receive on behalf of the Bank any payment required to be made into the Bank, or any bill, hundies or jother securities required to be delivered into the Bank, under any law or rule, regulations or other instructions having the force of law, the same may be paid or delivered into the bank so appointed as the agent of the Bank.] (Emphasis supplied) 7.4 On careful reading of above reproduced Section 45, it can be noticed that, RBI, under the direction of Central Government of India having regard to public interest, convenience of banking and other factors, can appoint a national bank or the State Bank to transact business as its agent at any place in India. Drawing power from this Section, RBI appoints various national banks/public sector banks for collection of various taxes and making payment of pension etc. This would mean that various national banks are agents of the RBI. 7.5 The Central Govt. of India by Notification No. 22/2006-ST has given exemption from the payment of service tax of any taxable serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case law cited by the learned D.R. and reliance placed in the case of Malwa Industries Ltd (supra) we find that in that case, the Apex Court was considering the situation of exemption by a notification from a countervailing duty. Learned Commissioner (A.R.) was relying upon this decision to canvass his point that exemption notification should be read literally and should be construed liberally once it is concluded that benefits the notification is applicable. We do not find any merits in the said submission made by the learned D.R. inasmuch as that the definition of assessee in the Finance Act in Section 65(7) clearly states that assessee means a person liable to pay service tax and includes his agent . In the case in hand RBI a person liable to pay tax as an assessee but for exemption, will include their agents viz. Banks appointed under Section 45 of RBI Act, to execute functions of RBI. Accordingly, the ratio of the judgement of the Apex Court as cited by learned A.R. may not be applicable in the facts of this case. In our view the reliance placed by the learned Commissioner (A.R.) in the case of Uttam Industries (supra) may also not carry the case of revenue any further as f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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