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TMI Blog2015 (1) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... from discounting of bills and the availment of CENVAT Credit. The petitioner bank replied to the said show cause notice and categorically asserts that the amount charged by way of an interest from the customers based on the credit limits is accounted under the head 'Interest on Bills' and where there is no pre- sanctioned limit, when the bills are presented, the value of bill is credited to the customers' account after deducting discounting charges/interest and the same is accounted under the head 'Discount on Bills'. According to the bank the RB1 guidelines provides a separate head for the aforesaid amount which in effect partake the character of an interest which is not eligible to service taxes. Both the petitioner and the department re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. According to him, whatever the amount is received on discounting the bills it does not partake the character of an interest unless the conditions imposed on the said notification are strictly adhered to. He submits that the bank could not produce before the assessing authority the separate bills or the challan relating to the income from discounting the bills and, therefore, the authority have rightly denied the claim of the petitioner. 4. It appears from the impugned order that the total demand is made for a sum of Rs. 17.01 crores out of which Rs. 11.02 crores are on account of non-payment of service tax towards interest on bill discounting and Rs. 5.99 crores for the wrong availment of the CENVAT Credit. 5. CENVAT Credit R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not eligible to service tax. 7. The meaningful reading of the notification dated 22-9-2004, prima facie, suggests that the discount earned on discounting of the bills, if shown separately, is exempted from the taxable services in equivalence to the amount of interest on the overdraft or the credit. The interpretation made by the authority that exemption on account of interest is limited to the over draft facility and the cash credit and not on the amount while discounting the bills are not free from any doubt. The notification clearly provides for discounting of the bills to be exempted from the purview of the taxable services and, therefore, this Court does not accept the interpretation tried to be given to such notification by the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp;The portion of the impugned order by which the Tribunal directed the petitioner to deposit 50% of the duty levied on the taxable services is hereby quashed and set aside. 11. The petitioner is directed to deposit 50% of the duty imposed over the CENVAT credit within fortnight from date with the appropriate authority. Once the deposit is made by the petitioner-bank, the Tribunal is directed to take utmost steps to dispose of the appeal as expeditiously as possible without granting unnecessary adjournments and preferably within four weeks from the date of communication this order in accordance with law. 12. Needless to mention that this Court has not gone into the merits of the said appeal. 13. The observations and findin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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