2016 (3) TMI 354

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..... ot levy service tax on an activity which is essentially cash management service, by taking aid of other general charging heads, such as business auxiliary service. Further, Section 65A of the Act, while dealing with classification of taxable services, has clarified in sub-section (2) that “when for any reason, a taxable service is, prima facie, classifiable under two or more sub-clauses of clause (105) of Section 65, classification shall be effected in the prescribed manner - No demand can be made - Decided against the revenue.
MR. SHIVA KIRTI SINGH AND MRS. R. BANUMATHI, JJ For the Petitioner : Mr. K. Radhakrishna, Sr. Adv., Mr. Rajiv Nanda, Adv., Ms. Rashmi Malhotra, Adv., Mr. B. Krishna Prasad, AOR And Ms. Shweta Garg, Adv. For th .....

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..... uch exclusion, the authorities cannot levy service tax by indirect method of charging the same service under the head "business auxiliary service". Since the meaning and significance of "cash management service", the term not defined under the Act, was not very clear, the High Court has taken note of clarification contained in the Circular issued by the Central Board of Excise and Customs (CBEC) dated 01.06.2007. The relevant part of that clarification letter is as follows: "At present cash management is specifically excluded from the scope of this service. Specific exclusion of cash management is being omitted. Consequently, cash management services will be leviable to service tax under this service. Cash management services includes .....

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..... auxiliary to any activity specified in sub-clauses (i) to (vi), but those activities in turn do not specifically relate to banking and other financial services. Rather such banking and other financial services are specifically covered by clause (12) of Section 65. In that view of the matter, the High Court held that Clause (12) of Section 65 covers all charging services rendered by the Banks. The High Court is further of the view that when cash management services stood excluded from the purview of service tax at the hands of the Bank until 31.05.2007, the authorities cannot levy service tax on an activity which is essentially cash management service, by taking aid of other general charging heads, such as business auxiliary service. Havin .....

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