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TMI Blog2008 (9) TMI 863X X X X Extracts X X X X X X X X Extracts X X X X ..... 73 of the Act, along with interest which was also confirmed and appropriated under Section 75 of the Act, besides, imposing penalty under Section 76 read with Section 78 of the Act and further penalty of Rs. 1,000/- and Rs. 5,000/- under Section 77 of the Act holding that the charges leveled in the SCN are proved conclusively as agreed by them in the statement recorded under section 14 of the Central Excise Act. 2. Being aggrieved by the above order, the appellant has filed the present appeal along with application for stay of penalty. The contentions of the appellant are summarized as under :- (i) that the appellant is not providing, any services as covered by banking and other financial services which fact has been ignored by the Assistant Commissioner, Satara; (ii) that the Assistant Commissioner has ignored the definition of banking and other financial services given under Section 65(12) of the Act; (iii) that the Assistant Commissioner has failed to appreciate that the appellant was not issuing drafts or bankers cheques; (iv) that the appellant was issuing their cheques from the cheque book issued by UTI Bank or Syndicate Bank or other banks stated in the SCN wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate that no penalty has been proposed in the SCN for non-registration; (xv) that the Assistant Commissioner has failed to appreciate that there was no suppression of value of taxable service and therefore, no penalty was imposable under Sections 76, 77 of the Act. 3. PH was granted on 5-9-2008 at 11.30 AM. Shri V.Y. Khare, Company Secretary (practicing), duly authorized by the appellant appeared before me. During the hearing, in addition to reiterating the submissions made in the appeal memorandum, he filed a written submission along with sample copies of documents presenting the transactions of the appellant with the Bank i.e. AXIS Bank Ltd. wherein the appellant has got their account and other documents relating to the members of the society. 3.1 In the written submission, the following additional points were urged :- (i) that the documents relied upon by the Department particularly, the statement of Shri P.K. Barve was not attached with the SCN which violates the principle of natural justice; (ii) that the adjudicating authority has recorded his findings that the assessee was required to register under the category of Banking and Other financial services (i.e. Busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to issue their own DDs etc. However, the appellant had a tie-up with other Bank organizations viz. UTI Bank, Ichalkaranji Janata Sahakari Bank and Syndicate Bank and the cheques of these Banks are being issued to their customers by the appellant. It was further alleged that the services of issue of cheques is provided under other Banking institution s name and accordingly, they are not eligible for exemption under Notification No. 6/2005-S.T., dated 1-3-2005. From the above, it is seen that the SCN has identified the appellant as a non-banking institution . It is, therefore, necessary to see what is the meaning assigned to non-banking financial institutions . Before seeing the definition of non banking financial institution , it has to be seen what is the definition available for a Banking and other Financial services during the material period. (A) The definition for the period 10-9-2004 to 17-4-2006. banking and other financial services means - (a) the following services provided by a banking company or a financial institution including a non-banking financial company or any other body corporate or commercial concern, namely : (i) financial leasing services includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ft facility, safe deposit locker, safe vaults, and operation of bank accounts which are regulated under RBI Act. In other words, for doing above service it is a mandatory requirement that the appellant works/governed under the RBI Act. But the appellant is not governed under RBI Act. In short, whatever the services mentioned in the definition available during the period from 10-9-2004 to 10/2006 cannot be linked to the appellant. 4.2 Though under the above definition, the activities of the appellant arc not coming under banking and other financial services , for academic interest, I would like to produce the meaning for non-banking financial company , since the SCN recognizes the services of the appellant as non-banking financial company and the OIO also concludes that the charges mentioned in the SCN have been proved. The meaning of the non-banking financial company is given under Section 45-I(f) of the Reserve Bank of India Act, 1934. non-banking financial company means : (i) a financial institution which is a company; (ii) a non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attached to the SCN and thus, the principle of natural justice was violated. Further the appellant also questions the conclusion of the adjudicating authority regarding clubbing of Banking and other Financial services and Business Auxiliary Services as one and the same and accordingly, he submits that the OIO is vague and has evolved a new kind of service alien to the Service Tax law. The above are facts and thus do not require any discussion. The appellant further questions that though the SCN was silent for a proposal of imposing penalty for non-registration, the adjudicating authority has imposed penalty of Rs. 1,000/- under Section 77 for not obtaining registration required under Section 69 of the Act. The contention of the appellant is correct inasmuch as the SCN does not contain the proposal for imposing penalty for non-registration which also shows that the lower authority has traversed beyond the allegations contained in the SCN which is not permitted in the law. 5. In view of the above discussions and facts, no case has been made out against the appellant and accordingly, penalties imposed under various sections and interest confirmed also do not survive. 6. Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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