9911796707
TMI Blog2008 (9) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... . CHACKO, MEMBER (JUDICIAL) and P. KARTHIKEYAN, MEMBER (TECHNICAL) A.R. Krishnan for the Appellant. N.J. Kumaresh for the Respondent. ORDER [Order per P.G. Chacko, Member (Judicial) - In adjudication of a show-cause notice dated 16-2-2007, the ld. Commissioner demanded service tax of over Rs. 2.49 crores from the appellants under the head Banking and Other Financial Services (BOFS) falling under section 65(12) of the Finance Act, 1994, for the period August 2002 to March 2006. He also imposed penalties on them. After examining the records and hearing both sides, we note that the impugned demand is on the gross amount of Rs. 2 8,60,43,445 paid by Citibank (appellant) to 'VISA' as consideration for the servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said date. In this connection, reference is made to a similar transaction involving a stock exchange, examined by CBEC in circular dated 18-5-2007 It is pointed out by the ld. consultant that the Board clarified that the transactions between the exchanges and their clearing houses would not amount to provision and transfer of information and data processing'. Contextually, we note that it was this limb of BOFS under section 65(12) of the Act which has been invoked by the department in the present case for levy of service tax from the appellant. It is also pointed out that the service received by the Acquiring Bank from VISA was similar to that rendered by the former to Merchant Establishment. As between the Acquiring Bank and Merc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xigible to service tax in the hands of the service-recipient who was resident in India. We have heard the ld. JCDR also who has argued in defence of the impugned order. 2. After considering the submissions, we have found prima facie case for the appellant against the demand of service tax and penalties. The submissions made by the ld. consultant, which we do not want to repeat, are impressive. He has explained the mechanism of operation of VISA cards and we are convinced, for the present purpose, that the appellant qua Acquiring Bank is not liable to pay service tax in the BOFS category in respect of the amount paid by them to VISA during the material period. Prima facie, such liability arose for the first time on 1-5-2006, from whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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