By TIOL News Service

MUMBAI, AUG 08, 2016: THIS is a Revenue appeal.

The issue is regarding the service tax liability on the operations undertaken by the respondent in respect of ATM. It is the case of the revenue in the show-cause notice that the respondent for the period 2004-05, 2008-09 had rendered the services of Management, Maintenance and Repair Services, when they erect ATM machines for various banks and that appellant is also liable to discharge the service tax on Business Auxiliary Service when they have written off bad debts in the financial year 2007-08 and 2008-09.

Respondent contended that service tax liability on ATM operation as Management, Maintenance and Repair services was brought under service tax net from 01.05.2006, for which they have already discharged the service tax liability and, therefore, for the earlier period, tax liability does not arise.

The Adjudicating Authority dropped the proceedings and, therefore, Revenue is in appeal.

The Bench observed that the AA had not erred.

Inasmuch as -

++ Specific category of the service tax liability on ATM operation as Management, Maintenance and Repair services has been introduced from 01.05.2006 would itself indicate that earlier the said services were not to be taxed.

++ Secondly, the demand of the tax liability in the show-cause notice is also on the cleaning services holding that the respondent is providing cleaning services. …we find that the cleaning activity undertaken by the respondent is in respect of soiled notes stuck in the machine, various other operations of the ATM machine and removal of waste paper in and around the machine. Agreement entered by the respondent with their service recipient clearly indicate that the cleaning activity is in respect of ATM Machine only.

Holding that the appeal of the revenue has no merits, the same was rejected.

(See 2016-TIOL-1988-CESTAT-MUM)