TMI Blog2019 (4) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... , that too, with an intend to evade the duty but there is no such evidence on record which may prove beyond sufficient doubt the willful default on part of the appellant - In absence of any such evidence, the extended period would not have been invoked. Appeal allowed - decided in favor of appellant. - Service Tax Appeal No. ST/52489/2016-ST [DB] - ST/A/53562/2018-CU[DB] - Dated:- 20-12-2018 - MR. C.L. MAHAR, MEMBER (TECHNICAL) And MRS. RACHNA GUPTA, MEMBER (JUDICIAL) Present for the Appellant: Mr. A.K. Batra, C.A. Present for the Respondent: Mr. Vivek Pandey, D.R. ORDER PER: RACHNA GUPTA The appellant is engaged in providing banking and other financial services and are filing ST-3 returns as per the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants that the recovery even of commitment charges has wrongly been confirmed; as such charges are not taxable under the category of banking and other financial services. More so, for the reason that commitment charges have no relations to the services provided but are penal in nature of liquidated damages. 4. Above all, by confirming the demand on commitment charges, Commissioner has gone beyond the scope of show cause notice, which has proposed recovery of Service Tax only on interest earned. Finally, arguing that the Department was not entitled to invoke the extended period of limitation the order under challenge is prayed to be set aside. The following case laws have been relied upon by the appellant: 1. CCE, Chennai vs. Amalg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice tax is leviable on interest in the category of banking and financial services. 7. The Appellant s plea is that commitment charges is also the part of the interest. To appreciate the same, we observe that term interest has not been defined in Finance Act, 1994. 8. It was defined as follows, vide Interest Act, 1974 before its repeal:- Interest means interest on loans and advances made in India and includes (a) commitment charges on unutilized portion of any credit sanctioned for being availed of in India; and (b) discount on promissory notes and bills of exchange drawn or made in India, but does not include- (i) Interest referred to in sub-section (1B) of Section 42 of the Reserve Bank of India Act, 1934 (2 of 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e observations of the Madras High Court in the case of Vishwapriya Financial Services and Securities Ltd. v. CIT, (2002) 258 ITR 497 are noteworthy in this regard :- The definition of interest, after referring to the interest payable in any manner in respect of any moneys borrowed or debt incurred proceeds to include in the terms money borrowed or debt incurred, deposits, claims and other similar right or obligation and further includes any service fee or other charge in respect of the moneys borrowed or debt incurred which would include deposit, claim or other similar right or obligation, as also in respect of any credit facility which has not been utilised. This statutory definition regards amounts, which may not otherwise be regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /8/2004-TRU, dated 10-9-2004. Para 19.2 reads as under : The interest on loans has been specifically excluded by way of amendment to the provisions relating to the valuation. All such interests that are in the nature of interest on loan would thus remain excluded from taxable value . 9. The Commissioner has confirmed this demand observing that the said amount of commitment charges have been shown included in the taxable value and the liability thereof since has been discharged for 2006-07 but not for 2008-09 that for the later year same has been confirmed. But we are of the opinion that the Commissioner has wrongly relied upon the debit entry qua the commitment charges. This Tribunal in the case of CCE, Bombay vs. Ram Decorative ..... X X X X Extracts X X X X X X X X Extracts X X X X
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