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2013 (8) TMI 450 - AT - Service TaxLevy of service tax on charges collected on dishonoring of cheques - Bank is charging to assessee - assessee is charging to its customers - Assessee is Non-banking Financial Company - Cenvat credit - stay - waiver of pre deposit – Held that:- If the applicant is charging only exactly the same amount as charged by the bank, there will not be any double taxation since Cenvat credit of the amount already paid by the bank will be available for paying service tax to be paid by the applicant. If a higher charge is billed to the customer, the service tax charged to the customer gets increased on account of the differential amount charged by the applicant. - applicant has committed serious irregularity by taking Cenvat credit on a service, the cost of which is separately billed to the customer without service tax component which situation is comparable to a situation where credit of excise duty paid on inputs is taken and utilized for clearance of final product but the input is sold without reversal of the cenvat credit taken when it was received into the factory. Service being intangible, arguments are raised based on Rule 5 of Service Tax (Determination of Value) Rules, 2006 etc. But the situation is essentially the same as in the case of removal of inputs without reversal of credit taken and prima facie cannot be approved of and full recovery of such amount may be prima facie justifiable Waiver of pre-deposit – 1 Crore was ordered to be submitted as pre-deposit – rest of the duty to be waived till the final disposal – decided partly in favor of assesse.
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