2016 (2) TMI 940 - AT - Service Tax

Waiver of pre-deposit - exempted services as per the provisions of Rule 6(3) of Cenvat Credit Rules, 2004 - Banking and Financial Services - non-maintenance of separate books of accounts for taxable and exempted services - Held that - there is no justification in the confirmation of demand with interest and penalties for the reason that the services rendered by the appellant are not exempted by Notification 29/2004-ST. The said Notification only excludes the value of the amount received by the appellant towards the interest of over-draft facility and cash credit facility. Learned Counsel was correct in pointing out to us that the issue may be covered by the judgement of the Tribunal in the case of M/s Vaidyanath Urban Co-operative Bank Ltd. Versus Commissioner of Central Excise, Aurangabad 2015 (11) TMI 952 - CESTAT MUMBAI for the purpose of stay and we find it so. Accordingly, the application for waiver of pre-deposit of the amount involved is allowed and the recovery thereof is stayed till the disposal of appeal.

Summary

Issues:
1. Waiver of pre-deposit of an amount confirmed as 6% or 8% of the value of exempted services rendered by the appellant.

Analysis:
The appellant, a Co-operative Bank, filed a stay petition seeking a waiver of pre-deposit of an amount confirmed as 6% or 8% of the value of exempted services rendered. The Revenue contended that the amount reduced from the tax liability on interest on over-draft and cash credit facilities constitutes exempted services, triggering a liability under Rule 6(3) of Cenvat Credit Rules, 2004. However, the Tribunal found no justification in confirming the demand with interest and penalties as the services provided by the appellant were not exempted by Notification 29/2004-ST. The Tribunal noted that the said Notification only excludes the value of amounts received for interest on over-draft and cash credit facilities. The Tribunal referred to a previous judgment in the case of Vaidyanath Urban Co-operative Bank Ltd. to support the appellant's position. Consequently, the Tribunal allowed the application for waiver of pre-deposit, staying the recovery until the appeal's disposal.

This judgment revolves around the interpretation of the provisions of Rule 6(3) of Cenvat Credit Rules, 2004 concerning the liability arising from exempted services. The Tribunal examined whether the services provided by the appellant, a Co-operative Bank, fell under the purview of exempted services as contended by the Revenue. The Tribunal scrutinized the applicability of Notification 29/2004-ST to determine the scope of exempted services, specifically focusing on the exclusion of interest on over-draft and cash credit facilities. By referencing a prior judgment, the Tribunal established that the issue at hand was similar to a previously decided case, providing a basis for granting the waiver of pre-deposit to the appellant.

In conclusion, the judgment by the Appellate Tribunal CESTAT MUMBAI addressed the request for waiver of pre-deposit concerning the liability arising from exempted services rendered by a Co-operative Bank. By analyzing the provisions of Rule 6(3) of Cenvat Credit Rules, 2004 and the applicability of Notification 29/2004-ST, the Tribunal found in favor of the appellant, ruling that the services provided did not fall under the category of exempted services. The reference to a previous judgment further supported the Tribunal's decision to grant the waiver of pre-deposit and stay the recovery pending the appeal's disposal.