D.N. Panda, Judicial Member. - The appellant came in appeal against the Order-in-Original dated 21-1-2009 giving rising to following consequences :

"(i)Service Tax of Rs. 2,63,42,711 and Ed. Cess of Rs. 4,13,431 aggregating Rs. 2,67,56,142 was demanded in terms of provisions of section 73 of the Finance Act, 1994 (hereinafter referred to as "the Act") under extended period, along with interest due thereon under section 75, ibid, from M/s. ABN AMRO Bank, Noida;

(ii)(a) Penalty at the rate of Rs. 150 per day was imposed for failure in paying Service Tax from the due date of Service Tax to the date of payment of Service Tax for the period prior to 18-4-2006 under section 76, ibid and (b) Penalty at the rate of 2 per cent per month starting from 18-4-2006 to the date when the entire amount of Service Tax was paid was imposed under section 76 ibid and penalty under sub-clauses (a) and (b) above in totality shall not exceed the amount of service tax, i.e., Rs. 2,67,56,142;

(iii)Penalty of Rs. 1000 only was imposed under section 77 of Finance Act, 1994 on M/s. ABN AMRO Bank, Noida; and

(iv)Penalty of Rs. 4,00,00,000 (Rs. four crores only) was imposed under section 78 of Finance Act, 1994."

2. Basing on the result of an investigation, Show-Cause Notice (SCN) dated 3-10-2007 (Ref. : available at page 45 of the appeal folder) was issued to the appellant making allegation of evasion of service tax to the extent adjudicated as aforesaid in respect of "credit card services" provided by the Appellant. Ld. adjudicating authority examining the charges in the SCN, reply of the appellant thereto filed on 30-12-2008 (available at page 88 of the appeal folder) and taking into consideration the law in force at the relevant point of time, i.e., for the period 1-6-2002 to 30-4-2006, held that the nature of service provided by the appellants was "credit card services" within the meaning of the term "banking and other financial services" and invoked the taxable entry under section 65(72)(zm) of the Act for levy of service tax on the taxable service provided by the appellant. According to the scope of the term "banking and other financial services" included interchange fees received from "acquiring bank" and credit card charges received from card holders by the Appellant. The nature of service provided by the appellant bank fetched it the receipt from "acquiring bank" and made it liable to service tax for which service tax to the extent aforesaid was imposed in adjudication followed by penal consequences of law and levy of interest. Ld. Adjudicating Authority while adjudicating the matter considered meaning of the term "banking and other financial services" with the help of the definition given by section 65(10) and later named as section 65(12) of the Act.

3. Ld. Adjudicating authority in para 2 of the adjudication order indicated extent of enquiry and examination done at various stages to ascertain loss of Revenue and in para 4 of the order indicated how he was guided by the procedure followed in Banking Industry in providing "credit card services". The said para reads as under :—

"4. The procedure followed in banking industries in this context is summarized as under :

(i)banks are engaged in providing credit card services to its customer by way of issuing credit card as the Issuing Bank. They enter into an agreement with merchant establishment (ME)/service establishment (SE) and they undertake sale of goods or services to the holders of credit card issued by bank. ME/SE generate bill of concerned card holder with the help of machine installed by the bank at the premises of ME/SE. Bill thus generated is given to the bank for payment whereupon the bank reimburses the amount less a certain percentage of discount which is retained by the bank. Sometimes the issuing bank does not provide the machines to the ME/SE which may be provided by another bank known as Acquiring bank under certain terms and condition with the issuing bank and discount retained are sh