9911796707
TMI Blog2012 (10) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... er Sec.65(33a) of the Finance Act – Held that:- Fleet cards cannot be used to withdraw any cash and the bills in respect of the same are also settled by the appellant to the oil companies directly. It also has limited usage and is thus distinguishable with the credit cards on the basis of scope of usage and restrictions - income earned as a finance charge is nothing but the interest on loans given and interest on loans are not liable to service tax - ‘fleet card’ income earned by the appellant is not liable to service tax - - - 8/2012 - Dated:- 27-1-2012 - Shri P. Ayyam Perumal, J. REPRESENTED BY : S/Shri P.C. Anand, Chartered Accountant and K. Sivakumar, Senior Manager (Taxation), for the Assessee. Shri Reuban Andrew Joseph, I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax of ₹ 38,49,685/- along with interest under Sec. 73(1) and Sec.75 respectively and penalty under Sec.76 of the said Act. After due process of Law, the adjudicating authority confirmed the demand along with Interest and penalty as proposed in the show cause notice. 3. Being aggrieved by the said order, the appellant is in appeal mainly on the following grounds : (i) that the impugned order was passed without considering the fact that there is no levy of service tax on the interest i.e., money collected with reference to credit card transactions is nothing but interest on a loan which had been given after proper documentation and such interest are not liable to service tax; (ii) that the cards are issued only on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany and Shri K. Sivakumar, Senior Manager (Taxation) of the appellant company appeared before me and in addition to reiterating the submission made already in the Appeal Memorandum has further stated that in terms of Notification No. 29/2004 ST dated 22-9-2004 as amended the interest portion which is shown separately should not form part of the taxable value. Shri. Reuban Andrew Joseph, Inspector , appeared on behalf of the Department and reiterated the submission made in the impugned order and added that on a similar issue passed in O-I-Os 265/2009, dated 30-9-2009 and 57/2010, dated 18-2-2010, on appeal by M/s. Sundaram Finance Ltd., the Hon ble CESTAT has granted Stay vide Orders No. 104/2010, dated 1-3-2010 and 400/2010, dated 23-8-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed through the merchant establishment s banker and cards are offered to general public. On the other hand, fleet card is vehicle specific and can be used only in authorized petrol outlets for purchase of only fuel or lubricants for the specific vehicle and no cash withdrawals permitted. These cards are issued to appellants customers alone which is secured by the subject vehicle as collateral and upon execution of a loan/hypothecation agreement. 7. Although fleet cards effectively look like credit cards and use very similar technology, their use and implementation is significantly dissimilar enough to differentiate them as an alternate payment method. A quick review of the card facility would reveal that the fleet cards cannot be used to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly whereas while issuing a credit card no such hypothecation or any security is given. It is to be noted that no monetary benefit is offered to the appellant nor any monetary commitment charged on them by the oil companies and the appellant settles the bills raised by oil companies on a daily basis without deduction of any commission whereas this is not the case in general credit card transactions which are offered by banks and other institutions. Thus, in the instant case such income earned as a finance charge is nothing but the interest on loans given and interest on loans are not liable to service tax. 10. As long as income received is in the nature of interest on loan, I find that there is no question of service tax liability. The ref ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
