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TMI Blog2016 (10) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... f India and thus entitled to exemptions specified in clause (i) of Notification No. 22/2006-ST dated 31.3.2006." 2. Learned Commissioner (D.R.) while opening the arguments for Revenue submits that the factual matrix which according to him is that State Bank of Patiala is a banking company registered under Companies Act, 1956 and regulated by the Reserve Bank of India (herein after referred to as RBI) as per the provisions of Banking Regulations Act, 1949; The RBI in exercise of its authority conferred by Section 45 of Reserve Bank of India Act, 1934 appointed the respondent-assessee as an agent to receive remittances of taxes on RBI s behalf to credit the same into consolidated fund; for which a commission was paid by RBI; which was sought to be taxed by Revenue authorities. 3. It is the claim of the respondent - assessee that the amount received as commission is not liable to tax in view of Notification No. 22/06-ST dated 31.5.2006 and applied for refund of the service tax remitted by them. 4. After giving us the factual matrix, the learned D.R. has read Notification 22/2006-S.T and submits that the said Notification is very clear and it exempts only the taxable services provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India on behalf of the RBI. She would extensively read from the decision of the Bench in the case of Canara Bank (supra). Subsequently, she has drawn our attention to provisions of RBI Act, 1934, and more specifically to Section 21 and submits that the RBI is the only bank allowed to transact Government business of Centre and State. She also read Section 21B of the said Act and submits that the RBI Act has provisions for effect of agreement made between the banks and certain States. She further submits that as per the provisions of Section 45 of the RBI Act, the RBI is authorized for appointing agent or any Bank constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 or as defined in the State Bank of India (Subsidiary Banks) Act, 1959, for receiving on behalf of RBI any payment required to be made into the Bank or any bill, or any other security required to be delivered into the Bank. She has also submitted that the very same provisions were considered by the Tribunal in the case of Canara Bank (supra) and held in favour of the respondent. It is her submission that the definition of assessee means a person liable to pay service tax and inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cies, and the (Central Government) may hold at such places such balances as (it) may require." 7.3 It may be noticed from the reproduced Section, only RBI can transact the Government business in India which is to receive and also remit all the money on behalf of the Government of India. Section 21A of the RBI Act also empowers the RBI to transact Government business of States on agreement. Holistically, reading of Section 20, 21 and 21A of the RBI Act, would mean that RBI is supposed to receive all money on behalf of Govt. of India and remit the same and no one else is authorized to do so. If this be so, various taxes like collection of central excise, customs and service tax and amounts collected by sale of public deposit, RBI bonds, special discount scheme etc., and payment of pension etc, has to be done only by RBI. Considering the nature of enormous transactions involved in collection of taxes, Section 45 of the RBI Act has provided as under:- "45. Appointment of agents. (1) Unless otherwise directed by the Central Government with reference to any place, the Bank may, having regard to public interest, convenience of banking, banking development and such other factors which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agent will be eligible for exemption or otherwise is being contested in the appeal, in our view the question does not arise as Chapter V of the Finance Act, 1994, in Section 65 (7), the term assessee has been defined which is reproduced:- "Section 65 (7) - Assessee means a person liable to pay the service tax and includes his agent " 7.6 It can be seen from the above reproduced definition, the Finance Act itself acknowledges the fact that the person who is liable to pay service tax includes its agent which would mean in the case in hand that in the absence of Notification 22/2006-ST, RBI would be liable to pay service tax as also banks which are appointed by RBI as agent under Section 45 of RBI Act. Applying the same analogy, in our view if RBI is exempted from the service tax liability in respect of various services, its agent for doing such services also needs to be extended the same benefit. 7.7 We may also look at the present controversy from another angle. State Bank of Patiala has been appointed by RBI as its agent under Section 45 of the RBI Act. RBI itself has been entrusted by the Central Government to transact Government business. Hence once State Bank of Patiala has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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