Case Law Details
Canara Bank Vs Commissioner of Central Excise & Service Tax (LTU) (CESTAT Bangalore)
FULL TEXT OF THE CESTAT JUDGMENT
M/s. Canara Bank, the appellant, is a banking company and a body corporate, conducting their operations in India. It was alleged by the Department that the appellants were acting as the agents for the Reserve Bank of India and were receiving agency commission at the rates notified by RBI, on per transaction basis, in respect of receipts or payments made, on behalf of the Government of India. It was alleged that the services provided by the appellant to the RBI amounted to providing a taxable service under the Banking and other Financial Services which was taxable from 10.09.2004. The Department issued four show-cause notices to the appellants, which were confirmed vide Order-in-Original No.ST/59/2009-Commr.LTU dated 30.6.2009; Order-in-Original No.92/2010-CE (Commr.) dated 30.11.2010; Order-in-Original No.67/2011-ST (Commr.) dated 19.7.2011; Order-in-Appeal No.74/2011-ST (Commr.) dated 4.8.2011; and Order-in-Original No.3/2012-ST (Commr.) dated 19.1.2012. It was contended by the Department that CBEC vide its circular No. 356/53/2007 TRU has clarified that service is leviable on the taxable services provided irrespective of status of the consumer of service. There is no exemption from taxes on the ground that the same is Government.
2. The appellants contended that the services covered by the show-cause notice cannot be classified as “operation of bank accounts” under the category of “Banking and Other Financial Services”. There is no customer/client relationship between the bank and the Government. The services rendered by the bank are statutory function carried out on behalf of the Government therefore not liable to Service Tax. The learned Commissioner failed to appreciate the fact that the services were exempted by Notification 6/2006- ST dated 01.03.2006. The learned counsel for the appellants has relied upon the case of Canara Bank – 2012 (28) STR 369 (Tri. Ahmedabad) and he further submitted that the issue is squarely settled by the Larger Bench. In the case of Canara Bank cited supra, they are entitled for relief by setting aside the impugned order.
3. The learned AR has relied upon the decision of the Hon’ble Supreme Court of India in Civil Appeal No.3327 of 2007 and submitted that the issue is relating to the interpretation of an exemption Notification and the same needs to be interpreted The burden of proving the applicability would be on the assessee to show that it comes within the parameters of the exemption clause or exemption Notification.
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