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TMI Blog2012 (11) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) design and production of credit cards, (ii) development and implementation of usage, activation or similar campaigns and promotions VISA/Mastercard (iii) design, production and usage of collateral material to support any such campaigns and promotions and (iv) systems implementation to enhance the functionality of credit cards. 3. The notice had received following amount as business development incentive. S.No. Brand name owner Year Amount(Rs.) 1. VISA 2003-04 2,26,00,000/- 2. VISA 2004-05 51,14,896/- 3. Mastercard (R) 2006-07 2,31,55,000/- 4. According to Revenue the brand name owners gave incentive to the appellants to get the business of brand name owners enhance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aluation or development of prospective customer or vendor, public relation services, management or supervision" 5. The appellants did not pay service tax on amounts received by them from the two business entities located abroad as per provisions of section 66 of Finance Act 1994. So a Show Cause Notice was issued to the appellants demanding service tax along with interest and proposing penalties. The notice has been adjudicated resulting in confirmation of duty demand of Rs. 46,72,604/- along with interest and penalties under section 76 and 78 of Finance Act, 1994. Aggrieved by the order the appellants have filed this appeal. 6. The Counsel for appellants submit that the cards issued by the appellant are the property of the appellant and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e exempt from service tax. 9. Since the service in question was not liable to tax on both the above counts the Counsel requests for admission of the Appeal without pre-deposit of any dues arising from the impugned order. 10. Opposing the prayer the Ld. A. R. for Revenue relies on findings in para 21 to 23 and 28 and 29 of the order. Paras 21 to 23 explains the terms of the agreement with VISA. Paras 28 and 29 deal with agreement with Mastercard. It is sufficient to examine only para 21 to 23 at this prima facie stage. These are recorded below: "21. I have gone through the agreements entered into by the notice with VISA and Master Card and found that the following findings are relevant to determine the nature of services provided by the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1 RSV Incentive To support SBI's efforts to increase card usage and volumes during the programme period and subject to clause 4.5., Visa offers to pay SBI and incentive (the RSV Incentive) of US $ 1,150 per incremental million RSV generated on the cards in accordance to the computation defined in clause 1. 11. He further submits that the services in question were rendered in India and such services rendered in India cannot be considered to be exported. Further he points out that during substantial part of the period under consideration, there was a condition applicable to services categorized in Rule 3 (iii) that such services could be considered as exported only if the service was delivered outside India. Since the service is rendered i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties are separated in the agreements and paid for separately. So we do not want to give a final answer to this question at this prima facie stage. 14. The main component of revenue generated from the joint business is by way of sharing of commission from business establishments is not involved in the dispute before us. The dispute is only in respect of payments received by the appellants for promoting the business of the brand name owners. We are not able to prima facie agree with, the argument that the appellant is just promoting the brand names of VISA/Mastercard. We are prima facie of the view that the appellants were promoting the business of VISA/MasterCard and the impugned payments were for that. So we are prima facie not in agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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