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2018 (6) TMI 482 - AT - Service TaxBanking and Other Financial Services (BOFS) - an agreement with VISA for providing Member Support Services and connectivity services to the Member Banks and by virtue of this agreement, they are providing the support and connectivity to the banks - It appeared that VISA are not resident and have no office in India - invocation of provisions of Rule 2(1)(d)(iv) of STR 1994 - Held that - Larger Bench decision in the case of Standard Chartered Bank & Ors. vs. CST 2015 (8) TMI 686 - CESTAT DELHI (LB) , held that credit card services were specifically included as a separate service in the Finance Act, 2006 and it is substantive legislative, which enacts levy on the several transactions enumerated in the subclauses (i) (ii)(vii) specified in the definition set out in Section 65(33a) - appeal allowed - decided in favor of appellant.
Issues involved:
1. Whether M/s. Vijaya Bank is liable to pay service tax for providing Member Support Services and connectivity services to Member Banks under the category of Banking and Other Financial Services (BOFS). 2. Interpretation of Section 65(12) of the Finance Act, 1994 regarding credit card services. 3. Application of Rule 2(1)(d)(iv) of Service Tax Rules, 1994 for recovery of service tax. 4. Confirmation of service tax liability by the Joint Commissioner and Commissioner (A). 5. Relevance of previous tribunal decisions in similar cases. Detailed Analysis: 1. The appellants, M/s. Vijaya Bank, were engaged in providing taxable services under BOFS and were alleged to have an agreement with VISA for providing Member Support Services and connectivity services to Member Banks. The issue was whether they were liable to pay service tax amounting to ?16,82,771 for the period from 6.8.2002 to 30.9.2006. The Joint Commissioner and Commissioner (A) confirmed the service tax liability, leading to the present appeal. 2. The appellants contended that the interpretation of Section 65(12) was crucial, especially concerning credit card services. They argued that with effect from 1.5.2006, credit debit card services were elaborated, and the issue was settled by previous tribunal decisions. They referenced the case of CCE vs. M/s. Vijaya Bank & M/s. Canara Bank and the decision in the case of Standard Chartered Bank & Ors. vs. CST to support their claim that credit card services were specifically included as a separate service in the Finance Act, 2006, and were not inherently subsumed within the purview of credit card services defined in Section 65(10) or (12) as part of the BOFS. 3. The learned DR agreed with the decision of the Larger Bench, which settled the issue in favor of the appellants, further supporting their argument regarding the interpretation of credit card services under the Finance Act, 2006. 4. Consequently, the tribunal allowed the appeal in favor of M/s. Vijaya Bank, emphasizing the relevance of previous tribunal decisions and the interpretation of the Finance Act, 2006, in determining the liability for service tax under the BOFS category. This detailed analysis highlights the key legal issues, interpretations of relevant sections, application of service tax rules, confirmation of liability by authorities, and the impact of previous tribunal decisions on the final judgment.
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