Service Tax Interest on Personal Loan Taken on Credit Card

HDFC Bank is charging me service tax on interest paid for a personal loan (availed against a credit card ) EMIs being paid every month. The loan interest is not a kind of service. Is the bank correct in its policy of charging me the service tax for the same? I did speak to the bank officials and they said that, We take this opportunity to clarify that as per current Government of India guidelines, service tax as applicable will be levied on the prescribed fees, interest and other charges as applicable from time to time. Service tax will be applied on each of the applicable items and will be reflected in the Card member’s statement.

We would like to inform you that the service tax has been recently revised from 12.24% to 12.36% effective from 11th May 2007. Hence, all EMIs that are being billed currently carry the difference in the service tax as  ADD CESS’ and the same is payable by you. Is it correct on bank’s part? Please advise.