2008 (9) TMI 338 - AT - Service Tax

Banking and Financial Services - Credit Card Services - Goods Transport Services Revenue contended that - the Commissioner (Appeals) was justified in holding that the services rendered by VISA International along with the appellant are coming within the ambit of Banking and other Financial Services in terms of the reasons given by him in the impugned order. He also submits that the appellants have not furnished the copy of Order-in-Original Show Cause Notice and the reply to the show cause notice. Therefore the appeal is required to be dismissed under Rule 11A of the Act for not producing the documents appellant undertook to rectify the defects Stay of pre deposit granted early hearing permitted.

Summary

Issues involved: Classification of services for service tax liability, applicability of new category, time bar for issuing show cause notice, non-production of essential documents in appeal.

Classification of services for service tax liability: The appellant, a nationalized bank, availed services falling under 'Banking & Financial Services', 'Credit Card Services', and 'Goods Transport Services' without registering for service tax under 'Credit Card Services'. The Department categorized them under 'Banking & Financial Services' under Section 65(12)(vii) of the Finance Act, 1994. The appellant argued they should be classified under 'Credit Card Services' introduced in the Finance Act, 2006. The Commissioner (Appeals) dismissed their appeal, but the appellant cited judgments like M/s. Hindustan Zinc Ltd. and M/s. Firepro Systems Pvt. Ltd. to support their case. The Tribunal found in favor of the appellant, granting a full waiver of pre-deposit due to a strong case on merits and time bar issues.

Applicability of new category: The appellant contended that the introduction of 'Credit Card Services' in the Finance Act, 2006 should apply to them, as they started paying service tax under this category post its inclusion. They argued that services carried out by them did not fall under 'Banking & Financial Services'. Citing judgments like M/s. Hindustan Zinc Ltd. and M/s. Firepro Systems Pvt. Ltd., the appellant emphasized that the applicability of a new category should be considered for demanding service tax.

Time bar for issuing show cause notice: The appellant raised concerns over the delayed issuance of the show cause notice, which covered a period from August 2002 to September 2004 but was served later. They argued that the notice invoked a larger period than necessary. Despite the Department's submission justifying the inclusion of the appellant under 'Banking & Financial Services', the Tribunal found in favor of the appellant, considering the time bar issue and granting a full waiver of pre-deposit.

Non-production of essential documents in appeal: The Department raised objections regarding the non-submission of critical documents like Order-in-Original, Show Cause Notice, and the reply by the appellant. However, the Tribunal did not dismiss the appeal under Rule 11A of the Act, as the appellant's arguments based on classification of services and time bar were found strong and meritorious. The Tribunal granted the appellant a waiver of pre-deposit and scheduled an out-of-turn hearing due to the high revenue implication in the matter.