1. This is an appeal filed by M/s. Bank of Baroda, Nodal Bank, Service Branch, 101, Payal Complex, Above Laxmi Steel Furniture, Sayajigunj, Vadodara (hereinafter referred to as Appellants) against order-in-original No. D/ST/02/Offence/05, dated 28-1-2005 passed by the Deputy Commissioner, Central Excise & Customs and Service Tax, City Dn., Vadodara-II.

2. The facts of the case, in brief, are that the Appellants are providing service to the Government of India in relation to collection and refund of central excise duty, customs duty and service tax. The said service provided is liable to service tax under section 68 of the Finance Act, 1994, as amended, under the category of "banking and other financial services". The Appellants have received commission at the rate of 0.118% on total collection of customs duty, excise duty and service tax. As per notification No. 4/2001-ST, dated 9-7-2001, it appeared that they are liable to pay service tax with effect from 16-7-2001 on the amount of commission received by them for the service provided to the Government of India in relation to collection of the said duties or taxes. Since the Appellants had not paid the service tax during the period from 16-7-2001 to 9-9-2004, a show-cause notice No. R-V.V/City-HDFC/BOB/2004, dated 9-11-2004 was issued to the Appellants for recovery of service tax amounting to Rs. 2,13,07,252 on the commission received by the Appellants @ 0.118% on the total collection of customs duty, excise duty and service tax during the period 16-7-2001 to 9-9-2004 under section 67 of Finance Act, 1994.

3. This said show-cause notice was decided by the Deputy Commissioner, Central Excise, City Dn., Vadodara-II, vide the impugned order dated 28-1-2005 wherein he held that the service provided by the Appellants is covered under the clause "other auxiliary financial services" under the category of "banking and other financial services" and therefore the assessee is required to pay service tax on the amount of commission received on the collection of customs duty, excise duty and service tax. Accordingly, he passed the following order :-

(a)Confirmed the service tax amounting to Rs. 2,13,07,252 on the commission of Rs. 31,34,86,650 received by them during the period 16-7-2001 to 9-9-2004, under section 73(a) of the Finance Act, 1994.

(b)Confirmed the interest as applicable on the amount of service tax of Rs. 2,13,07,252 for the delay in making the payment of service tax, under section 75 of the Finance Act, 1994, as amended.

(c)Imposed a penalty of Rs. 500 under section 75A of the Finance Act, 1994, as amended, for not applying for service tax registration within the prescribed time limit.

(d)Imposed a penalty of Rs. 2,13,07,252 equivalent to the service tax evaded under section 78 of the Finance Act, 1994, as amended, for suppressing the value of taxable service for the period 16-7-2001 to 9-9-2004 and deliberate evasion.

4. Aggrieved by the impugned order dated 28-1-2005, the Appellants have filed the present appeal. In their Memorandum of Appeal, they have submitted that the subject service is not taxable as "advisory and other auxiliary financial services...." in the category of "banking and other financial services" as given in clause (vi) of section 65(11)/(12) of the Finance Act, 1994. They have submitted that the subject service is different from the "advisory and other auxiliary financial services" falling under clause (vi) of section 65(11)/(12) by giving the analogy of the classification of services given in Appendix 36 of the Hand Book of Procedure for Export Import Policy for the year 2002-07 which gives a list of 12 categories of services; the 7th category deals with the financial services; while sub-clause (d) thereof covers "all payment and money transmission services", sub-clause (k) thereof covers "advisory and other auxiliary financial services". They have further submitted on the basis of the WTO central product classification that the service rendered by them