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2018 (6) TMI 1253 - AT - Service TaxInterpretation of Statute - Rule 6 (7B) of the Service Tax Rules, 1994 - consolidated invoice issued covering all the transactions in a particular month - Whether law permits different service tax liability of the banks in case of its transaction with a merchant or with another scheduled bank? Held that - It is seen that the CBEC, vide their Circular dated 05/06/2015, has instructed the field formations, for the period 16/05/2008 to 06/07/2009, to accept the consolidated invoice for purposes of levy of Service Tax. Since this is a beneficial clarification to the respondent, the benefit of such clarification is extendable to the respondent even for the disputed period. There is no infirmity in the order passed by the lower Authority in taking the view that the consolidated invoice shows the amount of consideration on which Service Tax has been paid - appeal dismissed - decided against Revenue.
Issues:
1. Whether the Department's appeal against dropping proceedings initiated against a bank for Service Tax liability is valid. Analysis: The Department filed an appeal against the dropping of proceedings by the Commissioner of Central Excise against a bank regarding Service Tax liability. The bank was engaged in both merchant trading and proprietary trading of foreign currency. The Department alleged that the bank was not paying the correct Service Tax amount for proprietary transactions, where a fixed charge per transaction was levied. A show cause notice was issued demanding a substantial amount from the bank. The Commissioner, however, dropped the penalty, stating that the consolidated invoice raised by the bank covered all transactions adequately for Service Tax purposes. The Department argued that the bank was not paying the actual Service Tax liability for proprietary transactions and was using the consolidated invoice to circumvent tax obligations. The Department contended that the bank should pay Service Tax as per Rule 6 (7B) of Service Tax Rules, 1994. The legal provisions examined included Section 65 and Section 66 of the Finance Act, which define taxable services and the charge of Service Tax, respectively. Rule 6 (7B) of Service Tax Rules, 1994, provided an option for calculating Service Tax at a fixed rate for foreign currency exchange transactions. The issue revolved around whether the bank's payment of &8377; 100 per transaction was sufficient or if the bank needed to pay at the rate of 0.25% of the gross amount of currency exchange. The Tribunal considered a Circular by CBEC instructing to accept consolidated invoices for levy of Service Tax during the relevant period. The Tribunal found no fault in the lower authority's decision that the consolidated invoice adequately showed the consideration for Service Tax payment. Consequently, the Tribunal rejected the Revenue's appeal, upholding the lower authority's decision. In conclusion, the Tribunal found no merit in the Revenue's appeal, and the decision to reject the appeal was pronounced in the open court.
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