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TMI Blog2017 (5) TMI 1302X X X X Extracts X X X X X X X X Extracts X X X X ..... g the issue dated 12.05.2007 such activity which falls within the nature of money changing, cannot be charged to service tax under section 65(12) read with 65 (105)(zm) for the period upto 15.05.2008. Consequently, the demand of service tax in this case is not sustainable and there is no infirmity in the impugned order dropping the service tax. The activity of foreign exchange broking liable to service tax under the provisions of FA has been explained and the activities of the respondent will fall within the said section from 16.05.2008 - appeal rejected - decided against Revenue. - ST/1403/2010-ST[DB] - ST/A/53502/2017-CU[DB] - Dated:- 26-5-2017 - Mr. S.K. Mohanty, Member (Judicial) And Mr. V. Padmanabhan, Member (Technical) Shri B.L. Narsimhan, DR for the appellant Shri Rachit Jain, Advocate for the respondent ORDER Per: V. Padmanabhan The appeal filed by Revenue is against the Order-in-Original No.34/RDN/2010 dated 12.07.2010. 2. The brief facts of the case are that the respondent is engaged in rendering various travel-related services and is duly registered with the Service Tax Department for the same. 3. The Respondent issues travelers che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erated the grounds of appeal. Further, in his written submissions submitted on behalf of Revenue he emphasized the following points: i) The respondent have collected charges towards service charges encashment of travelers cheque, demand drafts, telegraph transfers, etc. They have also issued such instruments by collecting commission. In this process they acted as an intermediary between the Bank and tourists. Unlike money changers, who always hold the title for the of hard currency, the respondents can never hold the title for instruments such as travelers cheques. The CBEC vide their circular dated 06.10.2007 has clarified this point and have further clarified that service tax is not leviable on money changing per se, but will be leviable on foreign exchange broking services. ii) The activity engaged in by the respondent is in the nature of foreign exchange broker. They also indicate the consideration explicitly over the value of instrument unlike money changers who earn the difference between the sale and purchase rate on a particular day. iii) The respondent have acted as an intermediary between the bank and the customers. Since the transaction is not on principal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correctly, the relevant ratio of the Finance Act 1994 are reproduced below for the period upto 15.05.2008 and w.e.f. 16.05.2008. Upto 15.05.2008 Banking and other financial services means:- Section 65(12) a) The following services provided by a banking company or a financial institution including a non-banking financial company or any other body corporate, namely:- i), ii), iii) ..iv) securities and foreign exchange (Forex) broking. b) Foreign exchange broking provided by a foreign exchange broker other than those covered under sub-clause (a). 65 (105)(zm) to a customer, by a banking company or a financial institution including a non-banking financial company, in relation to a banking and other financial services. After the amendment: w.e.f. 16.05.2008:- Banking and other financial services means:- Section 65(12) a) the following services provided by a banking company or a financial institution including a non-banking financial company or any other body corporate or commercial concern namely:- i), ii), iii) ..iv) Securities and foreign exchange (forex) broking, and purchase or sale of foreign currency, including money changi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , dated 6-10-2005 [2006 (1) S.T.R. (C69)] stands superceded. 10. In the backdrop of the statutory provisions and clarifications as above, the issue to be examined is whether the activity undertaken by the respondent will be covered within foreign exchange broking or money changing. As per the circular dated 12.05.2007 if the activity is in the nature of money changing, service tax will not be leviable upto 15.05.2008. 11. The stand of the respondent is that they earned commission in respect of issue of letters of credit, demand draft, drivellers cheque, telegraph transfers etc. It has been submitted that the respondent is not engaged as a broker for foreign exchange broking activity, but they purchase foreign exchange and sold the same in the form of demand draft, travelers cheque etc. Accordingly, they have submitted that the commission earned by them is not in the nature of broking in foreign exchange. The foreign exchange is purchased by them on their own account and not on behalf of any other principal. 12. However, the Revenue s view is that the respondent has acted as an intermediary between the customer and the bank, unlike money changers Revenue has contended tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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