Case Law Details
DLF Cyber City Developers Limited Vs CST (CESTAT Chandigarh)
The sole issue is to be decided by us is that the Offshore Upfront Fee paid by the respondent is an interest or a fee.
We find that if it is an interest then service tax is not payable by the appellant in terms of the Circular No. F.No. B2/8/2004-TRU dt. 10.09.2004 wherein interest on loan is not the part of taxable value. We have gone through the facts of the case and the respondent has produced a letter from the Standard Chartered Bank dated 15.12.2014 to show that the Offshore Upfront Fee is nothing but an interest on buyer credit transaction as stipulated by the RBI Guidelines.
On going through the said letter, we hold that the said amount on which the service tax is being demanded and Upfront Fee is nothing but an interest and on interest, no service tax is payable by the respondent, therefore, we hold that the respondent is not liable to pay service tax on the said amount. Accordingly, we do not find any infirmity with the impugned order qua dropping the demand against the respondent. Therefore, we do not find any merit in the appeal filed by the revenue. Accordingly, the same is dismissed.
FULL TEXT OF THE CESTAT JUDGEMENT
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