G. Raghuram, J. (President) -
(1.)WHETHER services provided by a banking company, a financial institution, a non -banking financial company or any other body corporate or a commercial concern, towards settlement of payments to an acquiring bank and a merchant establishment (ME), in relation to sale transactions at such establishment also constitute credit card services, in 'Banking and Other Financial Services' (BOFS), a taxable service defined and enumerated in the Finance Act, 1994 (the Act), is the core issue falling for our consideration. The period involved is 16 -07 -2001 to 30 -04 -2006, during which credit card services was enumerated within Banking and other Financial services, a taxable service introduced w.e.f. 16 -07 -2001 by the Finance Act, 2001. On and from 01 -05 -2006 credit card services was deleted from BOFS and incorporated into a distinct service, which we shall for convenience refer to as card services.
(2.)WE are assembled to answer the reference made by a Ld. Division Bench vide the order dated 16 -08 -2013 in ST. Appeal Nos. 143 to 145 of 2007 and 117 of 2010, being appeals preferred by Revenue and an assessee Bank, against adjudication orders. The issues referred are exclusively a classification issue.
The order dated 16 -08 -2013 referred the following questions of law:
i) Whether the introduction of the new, comprehensive definition of "credit card, debit card, charge card or other payment care service" vide Section 65(33a) read with Section 65(105)(zzzw) by the Finance Act, 2006, is substantive and seeks to levy all the transactions covered by use of Credit/Debit/Charge Card or is in continuation of the levy under Section 65(10) or (12), as the case may be, as held in ABN Amro decision in so far as credit card services are concerned?
ii) Whether the sub -clause (iii) in the definition of taxable service viz. "credit card, debit card, charge card of other payment card service" in Section 65(33a) can be said to be applicable retrospectively, i.e., from 16 July 2001 when section 65(72)(zm) became effective?
iii) Can 'merchants/merchant establishments' be considered 'customer' as envisaged in Section 65(72)(zm) of the Finance Act, 1994 as it stood prior to 1 -5 -2006?
iv) Whether Merchant Establishment Discount can be said to be 'received in relation to' credit card services when in fact in a particular transaction, the Acquiring bank receiving ME Discount may not have issued that particular credit card at all?
(3.)WE have heard Shri V. Lakshmikumaran, Shri Badarinarayan, Shri Yogendra Aldak, Shri Mihir Mehta, Shri Prakash Shah, Ms. Nupur Maheshwari, Learned counsel; Ld. Consultants Shri. Nihal Kothari, Shri Sunil Gabhawala and Shri Kewal Shah for the several assessees; and Shri B.K. Singh, Shri Rajiv Tandon, Shri Govind Krishna Dixit and Shri Amresh Jain for Revenue. Textual and contextual ambiguity in enumeration and definition of relevant provisions of the Act pertaining to BOFS invite interpretive exertion and have occasioned conflicting views regarding the reach and trajectory of the taxable service, at the level of departmental adjudication and in CESTAT as well. The reference order exemplifies the conflict of views on this aspect, in the Tribunal.