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TMI Blog2019 (4) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... ,38,64,684/- on the interest earned from the cash credit and over draft and also an amount of Rs. 8,82,30,460/- as an interest earned on demand loan and term loan both being the irregular amounts as not shown separately on an invoice, a bill or as the case may be, the challan issued for this purpose. Resultantly, for the period 2006-07 to 2008-09 show cause notice dated 24.08.2011 was served upon the appellant proposing the recovery of the service tax on the said amounts alongwith the interest at appropriate rate and the proportionate penalties. The said show cause notice was adjudicated by Commissioner vide its order No.070 dated 31.05.2016. The Commissioner has dropped the entire demand pertaining to interest received on cash credit, over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agency reported in 2018 (14) G.S.T.L. 251 (Tri. All.) 4. CCE, Bangalore vs. Motor World reported in 2012 (27) STR 225 (Kar.) 5. Ld. D.R., per-contra, has justified the order submitting that due consideration for all grounds of defence have been given by the Commissioner. The demand of Service Tax qua commitment charges has been confirmed as the same was found to be included in the taxable value drawn up for the aforesaid relevant statutory ST-3 returns for 2006-07 and 2007-08. It stands paid for 2006-07 but not for 2008-09, which is why the demand has been rightly confirmed. Appeal is accordingly, prayed to be dismissed. 6. After hearing both the parties, we are of the opinion that the narrow compass of the adjudication here is: Whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilized." 8.2. The Central Board of Direct Taxes vide Para 12.1 of Circular No. 202 dated 5-7-1976 in the context of Section 2(28A) of the Income-tax Act, 1961 has clarified as under : "The term interest has been defined in new clause (28A) inserted, in Section 2 of the Income-tax Act with a view to removing doubts about the true character of fees or other charges paid in respect of monies borrowed or in respect of credit facilities which have not been utilized. The definition is very wide and covers interest payable in any manner in respect of loans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich has not been utilised. Even in cases where there is no relationship of debtor and credit or borrower and lender, if payment is made in any manner in respect of any moneys received as deposits or on money claims or rights or obligations incurred in relation to money, such payment is, by this statutory definition, regarded as interest." 8.4 The Department's SLP against the decision of the Madras High Court has been dismissed by the Supreme Court in 264 ITR (Statute) 144. The appellant has also drawn attention to the pronouncement of the Supreme Court in the case of Titaghur Paper Mills Company Limited v. State of Orissa, (1983) 142 ITR 663 where in it is held that - "dictionary meaning of a word cannot be looked at where the word has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w cause notice being barred by time, we observe that the demand is for the year 2006-07 to 2008-09 but the show cause notice is of the year 2011 that is it has been issued beyond a normal period of one year. For invoking the extended period of 5 years, it was for the Department to prove the malafide in terms of suppression of facts or the mis-representation on part of the appellant, that too, with an intend to evade the duty but there is no such evidence on record which may prove beyond sufficient doubt the willful default on part of the appellant. Rather the Commissioner himself has dropped the major demand holding that the amount of interest is out of the ambit of tax. In absence of any such evidence, the extended period would not have be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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