Case Law Details
Rohan Motors Limited Vs Commissioner of Central Excise (CESTAT Delhi)
The demand of service tax in respect of the amount collected on account of bouncing of cheques and cancellation of orders is also not sustainable. These amount are penal in nature and not towards consideration for any service. In this connection reliance can be placed on the decisions of the Tribunal in M/s Jaipur Jewellery Show Vs. C.C.E & S.T. Jaipur11 and M/s K. N. Food Industries Pvt. Ltd. Vs. The Commissioner of CGST & Central Excise, Kanpur12.
21. The learned Authorized Representative of the Department has, however, placed reliance upon a ruling dated March, 2019 of the Appellate Authority for Advance Ruling Maharashtra to contend that the amount collected towards bouncing of cheque charges amounts to supply of service, but learned Counsel for the appellant has pointed out that the said order was rectified subsequently by the Appellate Authority for Advance Ruling Maharashtra in its order dated December 12, 2019 and it was held
“We hereby hold that the additional/Penal interest recovered by the Applicant from their customers against the delayed payment of monthly instalments of the load extended to such customers, would be exempt from GST in terms of Sl. 27 of the Notification No. 12\2017-C.T. (Rate) dated 28.06.2017.”
Thus, for all the reasons stated above, it is not possible to sustain the impugned order dated June 18, 2015 passed by Commissioner. It is, accordingly, set aside and the appeal is allowed.
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