TMI Blog2018 (11) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... tax liability - As far as the sale of mutual funds is concerned, same has been covered by exemption notification 13/2003-ST as the commission received on sale of goods was exempted - demand not sustainable. Levy of service tax - Sale of credit cards of SBI (Issuing Bank) and the commission received from SBI for such sale; d. Sale of mutual funds of SBI and the commission received for such sale from SBI - Held that:- The credit card services rendered by the appellant by selling and promoting the credit card issued by their parent company viz., SBI and the commission received by them for this service fall under the definition of credit card services w.e.f. 01.05.2006. Prior to the introduction of this definition the credit card services would have been chargeable to service tax to the extent applicable and as “banking and other financial services” - the demand made on sale of credit cards under the head of ‘business auxiliary services’ does not sustain. Whether the appellant has been issued show cause notice without jurisdiction as the head office of the appellant banking company had not rendered the services but their branches did? - Held that:- The assessee opted for central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities. It was also proposed to recover interest under Sec. 75 and impose penalties under Sec. 76, 77 78 of the Finance Act, 1994. The appellant contested the show cause notice before the original authority both on merits as well as on limitation. Appellant further argued that the show cause notice was issued without jurisdiction because it was noticed that it was issued to the Head Office of the appellant who were not providing any services. In fact, all services are being provided on their branch offices and therefore, no service tax liability accrues to the Head Office and the show cause notice was issued without jurisdiction. 3. After following due process of law, the learned Commissioner confirmed the demands as per the show cause notice and also confirmed recovery of interest. He further imposed penalties under Sec. 76, 77 78 of the Finance Act, 1994. Aggrieved by the impugned order this appeal has been filed by the appellant on the following grounds: (a) The show cause notice covering entire period is beyond the scope of Sec. 73 as the department was fully aware of the facts and activities of the appellant for over one year prior to the issue of show cause notice. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion received from RBI for such sale. c. Sale of credit cards of SBI (Issuing Bank) and the commission received from SBI for such sale. d. Sale of mutual funds of SBI and the commission received for such sale from SBI. 2) Whether extended period of limitation is invokable in this regard. 3) Whether the appellant has been issued show cause notice without jurisdiction as the head office of the appellant banking company had not rendered the services but their branches did. 4) Whether interest is recoverable and penalty is imposable under Sec. 76, 77 78 of the Finance Act, 1994. 7. Coming to the question of jurisdiction in issuing the show cause notice, we find that the assessee opted for centralized registration for some other services and has been discharging service tax accordingly. As far as the alleged four taxable services are considered, they have not paid any service tax. Having opted for centralized registration the appellant cannot now argue that their head office has no role in providing the services and hence cannot be issued a show cause notice. It is not the case of the appellant that their branch offices are separately registered with the department f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The said view is followed by the Revenue in the case of CITI Bank [2017 (12) TMI 18 CESTAT-Chennai]. We do not find any reason to deviate from such a view already taken. 8. In view of the above, we find no reason to take a different view in this case and we hold that the service of sale of Government of India bonds is not a service and there is no tax liability. As far as the sale of mutual funds is concerned, same has been covered by exemption notification 13/2003-ST as the commission received on sale of goods was exempted. The term good includes mutual funds as the same are movable property. As far as the collection of taxes on behalf of the Central Government and State Government is concerned, it is the argument of the revenue that these amount to business auxiliary services in terms of Sec. 65 (9) (iv). This clause defines business auxiliary services as any incidental or auxiliary support service such as billing, issue or collection or recovery of cheques, accounts and remittances, evaluation of prospective customer and public relation services and includes services as a commission agent but does not include technology service . In order to appreciate the scope of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t automatically apply to the credit card services when they were rendered as a part of the banking and other financial services . We, therefore, find that the credit card services rendered by the appellant by selling and promoting the credit card issued by their parent company viz., SBI and the commission received by them for this service fall under the definition of credit card services w.e.f. 01.05.2006. Prior to the introduction of this definition the credit card services would have been chargeable to service tax to the extent applicable and as banking and other financial services . Therefore, the demand made on sale of credit cards under the head of business auxiliary services does not sustain. 9. In view of the above, we find that the demands raised in the impugned order are not sustainable on merits and therefore, the same needs to be set aside. Consequently, the interest and penalties also need to be set aside and we do so. As we have decided that demand does not sustain on merits, we do not find it necessary to go into the question of limitation. 10. The appeal is allowed and the impugned order is set aside. (Pronounced in the Open Court on 27.09.2018) - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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