The Customs Excise Service Tax Appellate Tribunal (CESTAT) in Diebold Systems Pvt. Ltd v. Commissioner of Service Tax, Chennai, held that leasing of ATM to various Banks not chargeable to Service Tax under Banking and Other Financial Services (BOF).
In the present case, the appellants are engaged in marketing of Automatic Teller Machines (ATM) for which they are remitting service tax on the annual maintenance contract charges (AMC) collected. Besides the above service, they are also leasing ATMs to various Banks. The department took a stand that the appellants are liable to pay service tax for such leasing rental charges collected since it would fall under the category of Banking and Other Financial Services.
Denying the service tax liability under the above head, the appellants contended that the Finance Act was amended with effect from 1.5.2006 to specifically include ATM related service and thereafter the appellant has been discharging service tax under this category.
The bench observed that in the case of India Switch Co. Pvt. Ltd, the Tribunal had observed that ATM related services have been introduced with effect from 1.5.2006 only and the activities relating to ATM do not fall within the bank and other financial services prior to 1.5.2006.
In view of the past decisions of the Tribunal, the bench observed that the ATM service as a separate category of service has been introduced only with effect from 1-5-2006 and also the cash replenishment has also been included in the said services.
The bench further relied on the decision in C.C.E. v. GE India Industries (P) Ltd, held that the department cannot demand service tax on the ATM Services provided by the appellants under the head BOF.
Read the full text of the Order below.
