Clix Capital Services Pvt. Ltd. Vs Commissioner of Central Excise and Service Tax (CESTAT Chandigarh)
CESTAT Chandigarh allowed both appeals filed by Clix Capital Services Pvt. Ltd. and set aside the service tax demands, interest and penalties confirmed under the impugned orders dated 07.11.2012 and 28.07.2015. The disputes covered cheque bouncing charges, foreclosure charges, operating lease rentals, import of services under reverse charge and interest on alleged wrongful utilisation of CENVAT credit. On cheque bouncing and foreclosure charges, the Tribunal followed its earlier decision in the appellant’s own case, Final Order No. 60102-60103/2023 dated 20.04.2023, and noted that the Department’s appeal had subsequently been dismissed by the Supreme Court on 29.07.2024 in Civil Appeal No. 8066-8067 of 2024. The Tribunal held that the cheque bouncing charges were penal in nature, while foreclosure charges were not consideration for banking services. The demand on operating lease rentals was also dropped as the transaction did not satisfy the statutory conditions for financial leasing. The Tribunal further held that the foreign-currency remittances involved in employee share participation, legal advisory services, medical treatment and services received before October 2007 were not subject to service tax during the relevant period, including because the SCN and impugned order did not specify the service category. Interest on CENVAT credit was set aside as sufficient credit balance was available. The Tribunal also held that the entire demand was barred by limitation and allowed both appeals with consequential relief, if any, as per law.
Background and Disputed Service Tax Demands
Two appeals, ST/55729/2013 and ST/54344/2015, arose from impugned orders dated 07.11.2012 and 28.07.2015 passed by the Commissioner of Central Excise, Panchkula. Since most of the issues were common, CESTAT Chandigarh considered both appeals together.
