Case Law Details
TVS Finances and Services Ltd. Vs Commissioner of Central Excise (CESTAT Chennai)
The appellant is providing financial services and gives loans. For recovery of loans, the appellant collects post-dated cheques. There are instances when post-dated cheques after being presented to bank get dishonoured. The bank collects charges for dishonouring of the cheques. Such charges are recovered by the appellant from their clients. It appeared to Revenue that such charges should be included in the assessable value for levy of service tax. Therefore, proceedings were initiated which culminated into passing of the impugned order.
CESTAT have considered the submissions from both sides. On perusal of records, CESTAT note that there is dispute with the amount collected by the appellant from their clients is equal to the amount that the appellant pays to the bank due to dishonouring of cheques. Therefore, CESTAT are satisfied that the said expenses are reimbursable expenses. CESTAT , therefore, by applying the rule of Hon’ble Supreme Court in the case of M/s. Intercontinental Consultants and Technocrats Pvt. Ltd.,(supra) hold that the demand against the appellant is not sustainable. CESTAT , therefore, set aside the impugned order and allow the appeal with consequential relief, if any, to the appellant.
FULL TEXT OF THE CESTAT JUDGEMENT
The appellant is providing financial services and gives loans. For recovery of loans, the appellant collects post-dated cheques. There are instances when post-dated cheques after being presented to bank get dishonoured. The bank collects charges for dishonouring of the cheques. Such charges are recovered by the appellant from their clients. It appeared to Revenue that such charges should be included in the assessable value for levy of service tax. Therefore, proceedings were initiated which culminated into passing of the impugned order. The period involved is From Sept.’04 to Jun.’09. The provision of law that was invoked for raising the demand was Rule 5(1) of Service Tax [Determination of Value] Rules, 2006. The demands were confirmed and aggrieved by the same, the appellant is before this Tribunal.
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