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TMI Blog2020 (2) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... d a corpus fund to secure the depositors interest is not a mere transaction in money. The service rendered by the appellants does not find place either in the exclusion or in the Negative List. Therefore, the Learned Commissioner has correctly concluded that the activity undertaken by the appellants is not transaction in money. Further, Learned Commissioner referring to the Indian Contract Act, 1872 shows that the premium collected by the appellants constitutes a consideration as defined under Section 2(d) of the said Act. Learned Commissioner has relied upon the case of Deposit Insurance and Credit Guarantee Corporation. The appellants argued that it would be pertinent to note that the analogy of the Deposit Insurance and Credit Guarantee Corporation of India (DICGC) does not apply in the instant case - the Tribunal in the case has gone into various aspects and have concluded that it is clear that deposit insurance undertaken by the appellant falls within ambit of general insurance business defined in Section 65(49) read with Section 65(105)(d) of the Finance Act, 1994 - the activity of the appellant is same as that of DICGC and if DICGC is liable to pay Service Tax so is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eging that their activity must not be charged to Service Tax being Services under Section 65B of Finance Act, 1994 from 01.07.2012 onwards; the SCNs came to be confirmed by a common Order 64 65 dated 17.10.2017. Hence, the present appeals. 2. Sh. Ashok M.Cherian, Learned Counsel, appearing for the appellants submits that the demand was built upon on a wrong premise that the activity of the appellant is identical to the service rendered by Deposit Insurance And Credit Guarantee Corporation (DICGC); whereas the DICGC came into existence by an Act and none of the Directors shall be an officer of the Government or Reserve Bank of India whereas in their case, Chairman and Members of the Boards are Ministers and Government officials; DICGC is an Insurance company whereas the Board is constituted for rendering necessary assistance to the depositors of the societies which contributed fund; whereas DICGC indemnifies the Banks and guarantees the deposits made by individual depositors up to ₹ 1 Lakh, the Board administers the fund and the guarantee is provided by the Government; the nature of collection of contribution to the fund is to create a corpus and not to levy a fee or prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the well settled legal position as laid down by the Hon ble High Court of Delhi in Delhi Chit Fund Association Vs UOI, 2013 (30) STR347 (Del.), which was adopted by the Hon ble Supreme Court in UOI and Others Vs M/s Margadarshi Chit Funds Pvt. Ltd., etc (Civil Appeal No. 5724-5725/2011- decided on 04.07.2017), that the exclusionary part in definition clause (a)(iii) in Sub-Section 44 of Section 65B is construed in the light of or with the aid of Explanation 2 then any activity not being an activity of the nature explained in the said Explanation would be out of the clutches of the definition; applying this principle the activity of the appellant, which is only a transaction in money, would not be a service as defined under Sub-Section 44 of Section 65B of Finance Act, 1994. 3. Learned AR for the Department reiterated the findings of the learned Commissioner and submits that the Board is created under Kerala Cooperative Deposit Guarantee Scheme; the payment is mandatory for the Cooperative societies; upon joining the scheme, the liability of the cooperatives is taken care of; the case of DICGC decided by CESTAT, Mumbai,, 2015-TMI-143-CESTAT; the contributions of the soc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e . 6. We find that the Advocate for the appellants has relied upon the case of Margadarashi Chit Funds Pvt. Ltd. (supra). However, we find that the case pertains to chit fund companies who function like a Bank and the activity of the appellants is not comparable to that of the appellants therein. Therefore, the case of Margadarashi Chit Funds Pvt. Ltd. (supra) would not be of any help to the appellants. We find that Learned Commissioner has relied upon the case of Deposit Insurance and Credit Guarantee Corporation. The appellants argued that it would be pertinent to note that the analogy of the Deposit Insurance and Credit Guarantee Corporation of India (DICGC) does not apply in the instant case. We find that Learned Commissioner has rightly observed that DICGC is also providing guarantee for the deposits made by the public in commercial banks. The only difference between the activity performed by DICGC and the appellants is that whereas the former is extending guarantee to the deposits made by the public in commercial banks, the appellant is extending guarantee in respect of deposits made by the public in Co-operative credit societies. The nature of the service is same. Like ..... X X X X Extracts X X X X X X X X Extracts X X X X
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