ORDER
T.K. Jayaraman, Member (T)
1. This appeal has been filed against the Order-in-Appeal No. 11/2006 dated 06.03.2006 passed by the Commissioner of Customs & Central Excise (Appeals), Cochin.
2. The appellants rendered certain services to Citi Bank. The services were rendered predominantly to the customers of the Bank in relation to the services provided by the bank to them. However, the appellants did not take out any registration for payment of Service Tax. Revenue proceeded against them on the ground that the services rendered by them amounts to Business Auxiliary Services, which are taxable under the Finance Act, 1994. Hence, the original authority confirmed a demand of Service Tax of Rs. 3,38,661/- under Section 73(i) of the Finance Act, 1994 read with Rule 6 of Service Tax Rules 1994. Interest under Section 75 was also demanded. A penalty equal to the tax demanded was imposed under Section 78 of the Finance Act. The appellants were aggrieved over the decision of the original authority. Hence, they appealed to the Commissioner (Appeals). The Commissioner (Appeals) passed the impugned order upholding the Order-in-Original. Hence, the appellants have come before this Tribunal for relief.
3. Shri M.G. Varadarajan, the learned Advocate, appeared for the appellants and Shri K. Sambi Reddy, the learned JDR, for the Revenue.
4. We heard both sides. In the course of the hearing, the learned Advocate brought to our notice that the period of demand in this case is from July, 2003 to September, 2004. He brought to our notice the exemption Notification No. 25/2004-Service Tax dated 10.09.2004 by which, the services rendered by the appellant prior to 10th September, 2004 were exempt from payment of Service Tax. Our attention was drawn to the relevant provisions.
Exemption to value of taxable services received before 10.09.2004 in respect of services covered under extended scope of existing services as per Finance Act, 2004 (Notification No. 25/2004-ST dated 10.09.2004)(F.No. B2/8/2004-TRU).
G.S.R. (E) – In exercise of the powers conferred by Sub-section (1) of Section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts that portion of the value of following taxable services, namely –
(a) …
(b) …
(c) …
(d) …
(e) Services provided to a customer by any body corporate or commercial concern other than a banking company or a financial institution including a non-banking financial company, in relation to banking and other financial services;
4.1. The appellants claimed that they come under the ambit of the exemption because as the service provider, they are other than a banking company and they are entitled for exemption under this category. Even though the appellants had made this claim before the authorities, they have not examined this issue at all. In fact, in the impugned order, the Commissioner (Appeals) has not given any reason for denial of this exemption Notification. The learned Advocate pointed out that after 10th September 2004, the appellants had started payment of Service Tax under the category of Business Auxiliary Services. We find that the appellants are covered by the said exemption notification for the relevant period. In these circumstances, there is no justification for imposition of Service Tax and other attendant penalty. The impugned order has no merits. Therefore, the same is set aside. Thus, we allow the appeal with consequential relief, if any.
(Operative portion of this Order was pronounced in open court on conclusion of hearing)