Case Law Details
Kerala Co Operative Deposit Guarantee Fund Board Vs Commissioner of Central Tax and Central Excise (CESTAT Bangalore)
Collection of Contribution to Build Corpus Fund to Secure Depositors Interest liable to pay Service Tax.
Deposit Insurance Contract is also a general insurance contract as defined in law and merely because they are statutorily prescribed, they do not cease to be contract of insurance. The insurer is the Corporation, the insured are the banks and the beneficiary is the depositor(s)
In view of the above, the activity of the appellant is same as that of DICGC and if DICGC is liable to pay Service Tax so is the appellant liable to pay Service Tax.
Further, regarding penalties, the appellants are a body constituted by the Government. There are a number of decisions by the Tribunal and Higher Courts that mens rea cannot be attributed to the Public Sector Units. The appellant is a body constituted by Government. Therefore, CESTAT find that it is not expedient and necessitated to impose penalties. Therefore, while confirming the duty demand along with interest, CESTAT hold that the penalties imposed under Section 77 & 78 are liable to be set aside, by invoking the provisions of Section 80 of the Finance Act, 1994.
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