Law: Federal Excise Act, 2005

Section: 2(23),3,3(1),16(1)

Law: Banking Companies Ordinance, 1962

Section: 5

Law: Federal Excise Rules, 2005

Section: 40A(2)

ORDER RAZA MUNAWAR, ACCOUNTANT MEMBER:---.--- These cross appeals pertaining to Tax Periods 2008, 2009 and 2010 have been filed by the Registered Person/Appellant-bank as well as department against Order-In-Appeal Nos. 23, 24 25 dated 29.05.2013 respectively passed under Section 33 of the Federal Excise Act, 2005. 2. Brief facts of the case as transpired from impugned order are that the appellant is a scheduled bank, formed under the Bank of Punjab Act of 1989, and is engaged in banking business as defined in Section 5 of the Banking Companies Ordinance, of 1962. Learned Deputy Commissioner Inland Revenue [the DOR] examined the accounts of the appellant-bank for the calendar years 2008, 2009 and 2010 and found that the appellant-bank paid lesser amount of Federal Excise Duty [FED] on income declared in the accounts as fee, commission brokerage, income from dealing in foreign currencies and other income. The department confronted the appellant-bank with the short- paid amount. The appellant bank replied that some of its activities did not fall under the definition of service and some activities though fell within the definition of service yet are not taxable. The reply and reconciliations furnished by the appellant-bank did not satisfy the DCIR. He finalized the assessment vide assessment orders dated 30.01.2013 by charging FED @ 16% on the strength of S. NO.8 of Table-II of the First Schedule to the Federal Excise Act, 2005 on receipts from following activities: i. Dealing in foreign currency [2008, 2009 and 2010] ii. Home remittances [2008. 2009 and 2010] iii. Bills purchased etc. [2008] iv. Rebate from international business [2008, 2009 and 2010] v. Rebate on investment in Mutual Fund [2008] vi. Loan processing charges [2008 and 2010] vii. Godown charges [2008] viii. Wheat finance for Government of Punjab [2010] These orders were assailed before CIR(A). The primary argument of the appellant-bank before CIR(A) was that these activities did not fall within the ambit of chargeability under the Federal Excise Act, 2005. The learned CIR(A) by relying on Pakistan Machine Tool Factory (Pvt.) Ltd vs Commissioner of Sales Tax Central Zone B Karachi PTCL 2007 CL 223,…

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