TMI Blog2017 (11) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the service received for taking repossession of the vehicle by recovery agent is an input service which is used for the service of lending. Any service used for providing output service is an input service. As discussed above, the service of taking repossession of the vehicle which is an activity in relation to recovery of the loan is used for overall service of lending. Therefore as per the main part of the definition, the service of recovery agent received by the appellant is an input service. Appeal allowed - decided in favor of appellant. - ST/88910/13 - A/90596/17/STB - Dated:- 2-11-2017 - Shri Ramesh Nair, Member (Judicial) And Shri Raju, Member (Technical) Shri A. Hidaytullah, Sr. Counsel with Shri M.P. Joshi, Advo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icle by the recovery agent appointed by the appellant is not an input service for lending of loan to the customer, therefore the service does not fall under the category of input service, accordingly cenvat credit was disallowed. Being aggrieved by the order-in-original, appellant filed the present appeal. 2. Shri A. Hidaytullah, Ld. Sr. Counsel along with Shri Makarand P. Joshi, Ld. Counsel appearing on behalf of the appellant submits that the appellant's output service is undisputedly Banking and Other Financial Service which include the lending of money to the borrower against the hypothecation of the vehicle. In case of failure on the part of the borrower for non-payment of loan, the vehicle is seized through recovery agent. Reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have been initiated by department for demanding service tax on such recovery of seizing charges through various show cause notice covering the period from April 2007 to September 2015. All these show cause notices were adjudicated vide order dt. 24.1.2017 wherein demand of service tax was confirmed along with interest and penalties have been imposed on the appellants. The appellants appeal against the order dt. 24.1.2017 bearing No.ST/85897/17-Mum is pending before this Tribunal. In support of his submission he placed reliance on the following judgments: (i) Coca Cola India Pvt. Ltd. Vs.CCE, Pune - 2009 (242) ELT 168 (Bom.) (ii) CCE, Nagpur Vs. Ultratech Cement Ltd. - 2010(260) ELT 369 (Bom.) 3. On the other hand, Shri B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of vehicle was carried out by the recovery agent in connection with the recovery of the overdue loan amount. In our view the lending service is not limited to disbursing the loan but it includes the recovery of the said lended money which is one of the vital part of the overall activity of lending of money. Therefore the service received for taking repossession of the vehicle by recovery agent is an input service which is used for the service of lending. The definition of input service under Rule 2(1) of Cenvat Credit Rules, 2004 reads as under: 2(l) Input service means any service, - (i) used by a provider of taxable service for providing an output service, or (ii) used by the manufacturer, whether directly or indirectly, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore this service is clearly covered under the definition of 'Security' which means a thing deposit or pledged as a guarantee of the fulfillment of an undertaking or the repayment of the loan, to be forfeited in case of default. In view of this definition the service of taking repossession of the vehicle from the borrower is a part of security service which is specifically included in the definition of input service. For this reason also the service of repossession provided by the recovery agent to the appellant is an input service. Therefore the appellant is clearly entitled for the cenvat credit on such inputs service. However it is observed from the submission of the Ld. Counsel that the amount of recovery charges was recove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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