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2017 (11) TMI 1296 - AT - Service TaxBusiness Auxiliary Services - Revenue proceeded against the appellant to hold that such consideration received from Bank of Punjab shall be liable to service tax under the category of Business Auxiliary Service in terms of Section 65 (19) of the Finance Act, 1994 - Held that: - The Bank of Punjab’s agreement with the appellant clearly stipulates the conditions and the scope of activities of the appellant. A reading of the agreement makes it clear that the appellant is engaged as an extended facility of Bank of Punjab though only for a limited purpose of accepting foreign exchange at the rate specified by the said bank. All the foreign exchange received by the appellant are to be transmitted without any change to the Bank of Punjab who will pay certain consideration for this service - this activity is nothing but promotion of business of Bank of Punjab and also acting as an extended representative of the bank for a limited purpose and getting commission for the same - demand upheld for normal period. Extended period of limitation - penalties - Held that: - appellants acted in pursuance of an agreement in buying foreign exchange from the customers. The title of the agreement stating the same as franchisee agreement and the nature of business in dealing with foreign exchange might have given a bonafide reason for the appellant regarding their non-liability to service tax for this activity - extended period of limitation not invokable - penalties set aside. Appeal allowed in part.
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