Sale of Gold Coins Settled with Supplier: CESTAT Rules in favour of South Indian Bank [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Bangalore Bench, ruled in favour of the appellant, M/s. South Indian Bank, and held that there was neither consideration nor service in the present case as the appellant settled sales with supplier.

The appellant was importing gold coins/bullions through their branch network and on sale of these gold coins, the appellant earned an income which was liable to service tax as per the Revenue. The Commissioner confirmed the demand along with interest and imposed penalties under Sections 77 and 78 of the Finance Act, 1994. The appellant then approached the CESTAT.

The Chartered Accountant for the appellant submitted that the activity undertaken by the appellant does not fall under the category of service as there was a transfer of title of the goods. The Authorised Representative on behalf of the Revenue submitted that the appellant fulfils the basic conditions of Clearing and Forwarding Agents and hence are liable to pay service tax.

The tribunal observed that there is no service being rendered by the appellant to the supplier and instead the appellant sells the gold imported by him and after sales, the same is settled with the supplier based on the payment terms. The two member bench also noted that no consideration is being received from the supplier.

Conclusively. D.M. Misra (Judicial Member) and R. Bhagya Devi (Technical Member) allowed the appeal with consequential relief, if any, as per law.

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