Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2019 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (1) TMI 724 - AT - Service TaxCENVAT Credit - input services used in taxable as well as exempt services - Interest charged on account of late payment of brokerage and fee towards depository services - services in the nature of “banking and financial service” which is exempted from service tax also provided - Rule 6(3) of CCR - Held that:- The activity of a banking and financial service concern has been well defined under the RBI Act, Banking Regulation Act and section 65 (12) of the Finance Act, 1994. It is an undisputed fact that the Appellant is not doing any banking or financing or leasing activity. The interest earned has to be from deposit, loans or advances when the activity is of “Banking & Other Financial Service”. The interest on delayed payment of consideration in the present case i.e. delay in payment of brokerage and fee etc would not ipso facto lead to conclusion that the Appellant is rendering any banking or financial activity. The contention of the revenue that since the Appellant is also registered under the category of “Banking and Other Financial service” under Service tax and hence interest income is falling under that heading is wrong preposition. The interest arising due to late payment of dues by the clients to the Appellant would not fall under the category of Banking & other Financial service - the activity of the Appellant are not covered under the category of Banking & Financial services. In such case the demand under Rule 6 (3B) towards reversal of 50% of Cenvat Credit on input and input services is also not sustainable - Also as the cenvat credit has been correctly utilized for payment of service tax, hence the demand of service tax is not sustainable. Appeal allowed - decided in favor of appellant.
|