Bank Of India vs Cce & St, Indore

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy of the order?

4. Whether order is to be circulated to the Department Authorities?

No. ST/55217/2014-ST(SM)

Bank of India Appellant

Vs.

CCE & ST, Indore Respondent

No. ST/54422/2014-ST(SM)

[Arising out of common Order-in-Appeal No. IND/CEX/000/APP/88/2014 dated 30th May, 2014 passed by the Commissioner (Appeals), Customs & New Delhi]

CCE & ST, Indore Appellant

Vs.

Bank of India Respondent

Appearance

Shri Pradeep Mutreja, C.A. - for the Assessee

Shri B.B. Sharma, D.R. - for the Revenue

Coram : Honble Mr. R.K. Singh, Member (Technical)

F. Order No. 50398-50399/2015

Per R.K. Singh :

The appellant M/s Bank of India filed an appeal against Order-in-Appeal dated 30.5.2014 in terms of which service tax demand of Rs.7,60,141/- was confirmed on account of denial of Cenvat credit on rent-a-cab service on the ground that the said service was utilised by them for providing currency chest service which is not a taxable service and hence is exempted from paying service tax. The Revenue is in appeal against the same order in appeal for allowing Cenvat credit of Rs.2,49,002/- on security services on the ground that the said security services were utilised for providing the currency chest service which is non taxable.

2. Ld. Counsel for the appellants raised the following grounds:

(i) The currency chest is maintained as per RBI requirement and they use it for storing cash.

(ii) Transport of cash to or from currency can be done only under security and is authorised security vans.

(iii) There is no one to one correlation between the input service credit and the output service. Input service definition is inclusive and as held in the case of Jaypee Sidhi Cement Plant Vs. CCE, Bhopal  2014 (2008) LCX 0088, even services in relation to maintenance and first aid box have been allowed as input service.

(iv) They need currency chest to provide their banking and financial service inasmuch as they need cash to provide such banking and financial services in respect of foreign exchange transactions, ATM withdrawals beyond a certain frequency, saving bank transactions beyond a certain frequency handling customers cash in large quantities etc. for which they charge their customers and service tax is paid on such charges.

3. The ld. AR on the other hand stated that currency chest service is not taxable and therefore the Cenvat credit in respect of services utilised for providing the same cannot be allowed. He stated that the security services for which the credit has been allowed was provided only for the purpose of currency chest service in the form of security provided for transport of cash to/from currency chest.

4. Heard both sides. At the very outset it must be recorded that the appellants have been providing banking and financial services. Cash chest service is not a taxable service at all under the Finance Act, 1994 and therefore to say that it is an exempted service defies logic inasmuch a service can be exempted only if it is taxable to begin with. Even if it is presumed for the sake of argument that currency chest service is an exempted service, it has not been brought out as to whom they were providing the so called currency chest service (except to themselves) to sustain the allegation that it is their output service. Indeed the currency chest is required and maintained for providing banking and financial services. It can be nobodys case that the currency chest was not used to provide their output service viz. banking and financial services, inasmuch as such cash is required for providing various services which are covered under banking and financial services (as mentioned in para 2(iv) above. It is the appellants choice in how much safety they want to keep their cash and they have chosen currency chest for safety and security of their cash. Cash management including transport of cash to and from the currency chest is thus relatable to providing banking and financial services and the services (security services and rent-a-cab service (hiring security vans) are clearly required for such cash management/transfer and therefore they are clearly within the ambit of input services.

5. In these circumstances, it is clear that the impugned services constitutes input service in respect of the appellants non-exempt output service. Accordingly, the impugned input credit is clearly admissible which makes the impugned demand unsustainable. For the same reason, the Revenues appeal also does not sustain. Accordingly, the appellants (M/s Bank of Indias) appeal is allowed and Revenues appeal is rejected.

(Dictated & pronounced in open Court)

(R.K. Singh)

Member (Technical)

RM

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