Case Law Details
State Bank of Patiala Vs Commissioner, Central Excise and Central Goods and Service Tax (CESTAT Delhi)
Appellant urges that the show cause notice is misconceived, as prima facie giving of loans is not an output service, rather money in real terms somewhat akin to goods, goes out of the bank when the loan is advanced. Secondly, only for the reason that interest earned by the Bank on the loans is not chargeable to service tax, it cannot be said that giving of loan is exempt service. It is further urged that admittedly appellant have maintained proper books of accounts and statutory registers, and further they have filed their returns with the Department regularly. Further, there is no allegation in the show cause notice that the appellant have not filed the return properly and /or there is any suppression of facts or mis-statement in the returns. Accordingly, he prays for allowing the appeal both on limitation and on merit.
Held by CESTAT
Having considered the rival contentions, I find that giving of loans is not a service, rather it is an activity of the Bank in which money in real terms which is akin to goods, is given to borrower. Further, for the reason that interest earned by the Bank on loans is not liable to tax, the show cause notice alleged that giving of loan is an exempt service. Further, I find that the show cause notice have been issued after more than 32 months from the last date when the return was due from the financial year ending 31.03.2010. Accordingly, I hold that the show cause notice is bad for invoking the extended period of limitation. There is no suppression of facts or contumacious conduct on the part of the appellant.
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