2013 (2) TMI 156 - HC - Service Tax

Courier Agencies Services whether the service provided by couriers/angadias for delivery of cash received at one place and handed over at another place is a taxable service under courier agency - Assessees are members of All India Angadia Association and are engaged in providing services for transport of valuable documents like diamond packets and other articles of gold and silver from various branches to their Head Office and from the Head Office to branches, accordingly inter branch transports are effected Held that - Section 66, which is a charging Section, provides that a tax shall be levied at the rate of twelve per cent of the value of taxable services referred to in Section 65. Section 65 provides that taxable service means any service provided or to be provided to any person, by a courier agency in relation to door-to-door transportation of time sensitive documents, goods or articles - Thus, for the purpose of being chargeable to Service tax under Section 66 of the Act, taxable services of the nature provided under Section 65 would be required to be provided by such person. Taxable services should be provided to any person by a courier agency in relation to door-to-door transportation of time sensitive documents, goods or articles. On a conjoint reading of the definition of courier agency as defined under Section 65, it is apparent that it is only if a courier agency provides services in relation to door-to-door transportation of time-sensitive documents, goods or articles that the taxable event would take place In the present case, the service receiver hands over cash in Indian currency at a recipient branch, which transfers instructions to the delivery branch, where payment is made from the corpus available at the delivery branch. Thus, there is no movement of the cash from the recipient branch to the delivery branch. There is no transportation of such cash as contemplated under Section 65 of the Act. In the aforesaid premises, the transfer of cash by the assessees in the manner aforesaid, does not fall within the ambit of courier agency . As held by the Supreme Court in Murarilal Mahabir Prasad v. B.R. Vad (supra) 1975 (9) TMI 155 - SUPREME COURT OF INDIA , there is no equity about a tax in the sense that a provision by which a tax is imposed has to be construed strictly, regardless of the hardship that such a construction may cause either to the treasury or to the taxpayer. A charging section has to be construed strictly. If a person has not been brought within the ambit of the charging section by clear words, he cannot be taxed at all In the present case, insofar as the facility for transfer of money as provided by the assessees is concerned, the same has not been brought within the ambit of charging section by clear words and as such, the assessees cannot be taxed in respect of the same Tender of Indian currencies and its transmission and compensatory payment would not be covered by the levy of Service tax under heading courier agency Against the revenue.

Summary

Issues Involved:
1. Whether the service provided by couriers/angadias for delivery of cash received at one place and handed over at another place is a taxable service under the definition of "Courier Agency" as per Section 65(33) of the Finance Act, 1994.

Detailed Analysis:

1. Definition of Courier Agency:
The core issue revolves around whether the services rendered by couriers/angadias fall under the definition of "Courier Agency" as per Section 65(33) of the Finance Act, 1994. According to this section, a "courier agency" is defined as "any person engaged in the door-to-door transportation of time-sensitive documents, goods or articles utilizing the services of a person, either directly or indirectly, to carry or accompany such documents, goods or articles."

2. Tribunal's Decision:
The Tribunal had held that the services provided by the assessees involving the transfer of cash do not fall under the definition of "courier agency" and are not subject to Service tax. The Tribunal's decision was based on the fact that there is no actual transportation of the cash; rather, instructions are passed between branches to facilitate the transfer.

3. Arguments by the Appellant:
The appellant argued that the services provided by the angadias for cash transactions should be considered as courier services, even if the cash is not physically transported. The appellant contended that the essence of the service is the transfer of cash from one place to another, which should be taxable under the definition of "courier agency."

4. Arguments by the Respondent:
The respondent countered that the definition of "courier agency" explicitly requires door-to-door transportation of time-sensitive documents, goods, or articles. Since the cash transactions do not involve actual physical transportation but rather instructions for payment, they do not meet the criteria set forth in Section 65(33).

5. Judicial Precedents:
The respondent cited several Supreme Court decisions emphasizing the strict interpretation of fiscal statutes. The court must adhere to the clear and unambiguous language of the statute, and no tax can be imposed by inference or analogy.

- A.V. Fernandez v. State of Kerala: Emphasized that tax liability must be determined by the strict letter of the law.
- Murarilal Mahabir Prasad v. B.R. Vad: Stressed that a taxing provision must be construed strictly, and no tax can be imposed unless the subject falls squarely within the letter of the law.
- Mathuram Agrawal v. State of M.P.: Highlighted that the intention of the legislature in a taxation statute is to be gathered from the language of the provisions.
- CWT v. Ellis Bridge Gymkhana: Reinforced that a charging section must be construed strictly, and no one can be taxed by implication.

6. Court's Analysis:
The court analyzed the definition of "courier agency" and concluded that the services provided by the angadias do not involve the actual transportation of cash. The court noted that the statutory provisions require the physical movement of time-sensitive documents, goods, or articles, which is not the case with the cash transactions facilitated by the angadias.

7. Conclusion:
The court held that the service provided by couriers/angadias for delivery of cash received at one place and handed over at another place does not fall under the definition of "courier agency" as per Section 65(33) of the Finance Act, 1994. Therefore, such services are not subject to Service tax. However, the court clarified that if the cash is physically transported by a person, it would fall within the ambit of "courier agency" and be subject to Service tax.

8. Final Judgment:
The appeals were dismissed, and the court affirmed the Tribunal's decision that the tender of Indian currencies and its transmission and compensatory payment would not be covered by the levy of Service tax under the heading "courier agency." The court emphasized that the statutory provisions must be strictly construed, and no tax can be imposed unless the subject falls squarely within the letter of the law.