Axis Bank Ltd. vs Union of India

What is impugned in the present petition is a letter demanding payment of interest. It is not in dispute that the petitioner has already paid the Service Tax liability for the period post-1-5-2006. It is the contention of Shri Jetly that, in view of the judgment of the learned CESTAT at Mumbai in the case of Commissioner of Service Tax, Mumbai v. HDFC Bank Ltd., HSBC Bank Ltd. & ICICI Bank Ltd. 2013-TIOL-1363-CESTAT-MUM and the CESTAT at Delhi in the case of M/s. ABN Amro Bank v. CCE, Noida 2011-TIOL-1147-CESTAT-Del/there is no dispute with regard to the liability of the present petitioner to pay Service Tax after 1-5-2006. It is his contention that the only issue that was referred to the Larger Bench is with regard to the taxability of the acquiring Bank for the services rendered prior to that period.

Perusal of both the Judgments of the Mumbai Bench in the case of HDFC Bank and of Delhi Bench in the case of M/s. ABN Amro Bank, would reveal that, both the Judgments relate to the period prior to 1-5-2006. At least, prima facie, we find that there is no adjudication with regard to the period after 1-5-2006.

Perusal of the communication at page 36 would reveal that a meeting was held between the representatives of the Indian Banks'' Association and one Mr. M.R.R. Reddy, Addl. Commissioner of Service Tax Mumbai. Perusal thereof would also reveal that entire arrangement of credit card business was explained to Mr. Reddy. It was however suggested by Mr. Reddy that due to complexity of the matter, a representation should be made to Central Board of Excise and Customs (C.B.E.&C.) for seeking a clarification. It was further suggested that since the period of limitation was near completion, in respect of the return filed for the period from April 2007 to September 2007, the concerned banks should make payment of Service Tax due for that period. It was further agreed that the Service Tax department will not take any further action against the banks till a clarification is obtained from C.B.E.&C. It was further agreed that if C.B.E.&C. decides in favour of the banks, the Service Tax department will refund the Service Tax paid.

Perusal of Exhibit "E" to the petition would reveal that a representative has already addressed a letter dated 3rd November, 2012 to the Joint Secretary, Tax Planning and Legislature, Government of India.

It further appears that demand is also made by the Respondent No. 2 for further period and accordingly payment has been made by the petitioner under protest.

It is the case of the petitioner that the acquiring Bank has paid the entire Service Tax payable on the transactions. It is further the case of the petitioner that though the petitioner is not liable after payment of the Service Tax by the acquiring body, it has still made the payment under protest. It is further case of the petitioner that an issue as to whether after payment of entire dues by the acquiring bank, still a demand can be made against the issuing bank is yet to be adjudicated.

As already discussed hereinabove, the issue that has been decided by the Tribunal Mumbai so also at Delhi pertains to the period prior to 1-5-2006.

In that view of the matter, we would like clarification from Respondent No. 1 as to whether on a representation made by the Indian Bank''s Association a decision has been taken by the C.B.E. & C. or not. We would also like the Respondent Nos. 1 and 2 to state on affidavit as to whether in fact a meeting was held between the representatives of the Indian Bank''s Association and Mr. Reddy, the Addl. Commissioner of Service Tax, Mumbai as is reflected in the communication addressed by the petitioner on 25-10-2012. S.O. to 15-4-2015.