TaxTMI 
TaxTMI 
2020 (2) TMI 1493
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....ulminated in the issuance of show-cause notice dated 21.11.2011 to the appellant. The appellant is a Body Corporate as per Section 3B of Coal Mines Provident & Miscellaneous Provisions Act, 1948 and manages the following funds: (i) Coal Mines Provident Fund Scheme; (ii) Coal Mines Family Pension Scheme (merged with Pension Scheme in 1998); (iii) Coal Mines Pension Scheme; (iv) Coal Mines Deposit Linked Insurance Scheme. They collect these fund amount from Coal Companies and the Coal Mine Workers and invest them in various Banks and Securities so as to ensure a good return and pay provident fund, pension, etc., to the Coal Mine Workers as per specified rates. For such asset's management, they are paid an amount of 3% of the total amount so collected by the Coal Companies. It is the case of the Department that the appellant has provided the service of asset management (including management of provident fund; pension scheme and insurance scheme) which falls under the category of "Banking and Other Financial Services" as per Section 65(12) and is taxable under this head w.e.f. 16.07.2001 as per Section 65 (105) (zm) of the Finance Act, 1994. It is....
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....y the definition of "Banking and Financial Service". As the levy of service tax itself is contrary to law, the question of imposition of penalty does not arise. (x) Lastly, the notice is time barred and extended period of limitation cannot be invoked. 6. After considering the submissions made by the appellant, the Adjudicating Authority confirmed the demand as proposed along with interest under Section 75 and also imposed penalties. Aggrieved, the present appeal is filed on the following grounds: (i) They are a statutory organization created under the Act. They are performing duties of Welfare State Mandatory by the Directive Principles of State Policy under the Constitution. (ii) They have been exempted from Income Tax by CBDT under Section 10 (25) of the Income Tax Act,1961. (iii) The Order passed by the Commissioner is without jurisdiction and violating principles of natural justice. They also contested the invocation of extended period of limitation and imposition of penalty. They prayed that the impugned order may be set aside and the appeal may be allowed. 7. The Ld. Special Counsel for the Revenue, contends all the assertions in t....
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....rkers. These are specifically covered under the above definition. The second point to be examined is whether the appellant is a Banking Company or Financial Institution or any other Body Corporate or Commercial concern. He would submit that the appellant's organization has been created under the provisions of The Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948 (CMPFMP Act) and is headed by Board of Trustees. In terms of Section 3B of the Act, they shall be a Body Corporate under the name specified in the notification and statutorily have a perpetual succession. Therefore, the argument that they are Body Corporate, is not only far from truth but contrary to the provisions to the very Act which created the appellant. He would therefore, submit that there cannot be any doubt that the appellant is a Body Corporate and there is also no doubt that they are managing assets. There is also no doubt that they are receiving the consideration @ 3% of the total fund from the Coal Companies for managing these assets. The appellant's activities were especially covered under the definition of Banking and Financial Services. 8. On the question whether the appellant's activities ....
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....stration on their own. It is only after repeated letters and reminders, they took a registration, but still failed to file service tax return or pay service tax. This shows that the appellant's intention is to evade payment of service tax because they considered themselves to be above the law laid down by the Parliament. 13. For the same reasons, he would submit that the imposition of penalties upon the appellant is fully justified. 14. We have considered the arguments of both sides and perused the records. We find a little force in the arguments of the appellant that they are not a Body Corporate, but a Government Department performing some functions because the very Act which created them and entrusted them with the power states that they are a Body Corporate. Section 3B of the CMPFMP Act,1948, specifically mentions that the appellant is a Body Corporate. The next question to be considered is whether the appellant is covered by the definition of Banking and Finance Services. As can be seen from the definition reproduced above, asset management including portfolio management, all forms of fund management, pension fund management, custodial, depository and trust services, are....
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....d ordinary sense. The words used declare the intention of the Legislature. In the Kanai Lal Sur vs. Paramnidhi Sadhukhan, AIR 1957 SC 907, it was held that if the words used are capable of one construction only then it would not be open to the Courts to adopt any other hypothetical construction on the ground that such construction is more consistent with the alleged object and policy of the Act. 20. In applying rule of plain meaning any hardship and inconvenience cannot be the basis to alter the meaning to the language employed by the legislation. This is especially so in fiscal statutes and penal statutes. Nevertheless, if the plain language results in absurdity, the Court is entitled to determine the meaning of the word in the context in which it is used keeping in view the legislative purpose. Not only that, if the plain construction leads to anomaly and absurdity, the court having regard to the hardship and consequences that flow from such a provision can even explain the true intention of the legislation. Having observed general principles applicable to statutory interruption, it is now time to consider rules of interpretation with respect to taxation. 21. In....