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2018 (5) TMI 218 - AT - Service TaxCENVAT credit - taxable as well as exempt services - Rule 6(2) of CCR 2004 - case of Revenue is that since the appellant is providing service of lending wherein the interest is exempted, therefore, they are required to pay 8/6% of the value of such exempted service - N/N. 29/2004 - ST dated 22.9.2004 - Held that: - the notification does not exempt the service as whole whereas the service tax is exempted only to the extent of so much of the value of taxable service provided to a customer in relation to overdraft facility, cash credit facility or discounting of bills, bills of exchange or cheques as is equivalent to the amount of interest on such overdraft, cash credit or as the case may be. It is therefore, very clear that the service per se is not exempted, but a part of the taxable value is only exempted - If this be so, then it cannot be said that the service provided by the appellant is exempted. Identical issue decided in the case of M/s Vaidyanath Urban Co-operative Bank Ltd. Versus Commissioner of Central Excise, Aurangabad [2015 (11) TMI 952 - CESTAT MUMBAI], where it was held that the Banking and other Financial Service, which are the output service of the appellant are not fully exempted and accordingly, do not fall under the category of exempt service as defined under Rule 2(e) of the Cenvat Credit Rules, 2004. Appeal allowed - decided in favor of appellant.
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