9911796707
TMI Blog2013 (3) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... rest has been defined in new clause (28A) inserted, in Section 2 of the Income-tax Act with a view to removing doubts about the true character of fees or other charges paid in respect of monies borrowed or in respect of credit facilities which have not been utilized. The definition is very wide and covers interest payable in any manner in respect of loans, debts, deposits, claims and other similar rights or obligations. It also includes any service fees or other charges in respect of such loans, debts, deposits, etc. as also fees in the nature of commitment charges on unutilised portion of credit facilities. In view of the above discussions and also in conformity with the decision in the appellant’s own case for the earlier period by thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant, the Lower Adjudicating Authority issued two Show Cause Notices to the appellant as to why an amount of Rs. 7,30,611/- and Rs. 4,99,571/- towards S. Tax, Ed. Cess and SHE Cess for the period Feb, 2008 to September, 2008 and October, 2008 to March, 2009 respectively along with interest should not be demanded in terms of Section 73(1) and 75 of the Finance Act and penalty should not be imposed under Section 76 ibid. After due process of law, the Lower Adjudicating Authority confirmed the proposals initiated in the SCN vide the impugned Orders-in-Original. 3. Aggrieved by the impugned Orders the appellant had filed this appeal mainly on the following grounds : (i) that their payment of service tax on guarantee commission itself is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terests that are in the nature of interest on loan would thus remain excluded from taxable value . (vi) that Notification No. 29/2004, dated 29-9-2004 provides for an exemption in respect of value of taxable services provided to a customer by a banking company or financial institution including a non-banking company or any other body corporate or commercial concern in relation to - (a) overdraft facility; (b) Cash Credit facility; or (c) Discounting Bill of Exchange or Cheques. as is equivalent to amount of interest on such overdraft facility, cash credit, discount subject to the condition that it is shown separately in the invoice or bill or challan as the case may be. (vii) that perusal of the relevant clauses in the agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itten as well as oral. Before proceeding to decide the main issue I waive the pre-deposit. The issue to be decided is whether the appellant is liable to pay service tax on the amount collected as Commitment Charges in connection with providing of Banker Guarantee. 5.1 The appellant has, at length, discussed the non-taxability of Commitment Charges in their grounds of appeal. This order is limited to the sole issue of taxability of commitment charges. 5.2 The relevant clauses in the Agreement the appellant had with their group companies are as follows : (i) The guarantor has guaranteed and continues to guarantee repayment to Central Bank of India cash credit, overdraft and other facilities including any variation in the sanction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Para 12.1 of Circular No. 202 dated 5-7-1976 in the context of Section 2(28A) of the Income-tax Act, 1961 has clarified as under : The term interest has been defined in new clause (28A) inserted, in Section 2 of the Income-tax Act with a view to removing doubts about the true character of fees or other charges paid in respect of monies borrowed or in respect of credit facilities which have not been utilized. The definition is very wide and covers interest payable in any manner in respect of loans, debts, deposits, claims and other similar rights or obligations. It also includes any service fees or other charges in respect of such loans, debts, deposits, etc. as also fees in the nature of commitment charges on unutilised portion of credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Madras High Court has been dismissed by the Supreme Court in 264 ITR (Statute) 144. The appellant has also drawn attention to the pronouncement of the Supreme Court in the case of Titaghur Paper Mills Company Limited v. State of Orissa, (1983) 142 ITR 663 where in it is held that - dictionary meaning of a word cannot be looked at where the word has been statutorily defined and judiciously interpreted but where there is no such definition or interpretation, the Court may take aid of dictionaries to ascertain the meanings of a work in common parlance, bearing in mind that a word is used in different sense according to its context and a dictionary gives all the meanings of a word and the Court has therefore the context in which it ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
