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TMI Blog2013 (10) TMI 1113X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal in the case of Housing & Dev. Corporation Ltd. (HUDCO) Vs CST Ahmedabad [2011 (11) TMI 95 - CESTAT, AHMEDABAD] decided the appeal and held that service tax would be leviable on pre-payment of loan or foreclosure charges - service tax is leviable on foreclosure or pre-payment charges and in Indusind bank Ltd. Vs CST Chennai [2009 (9) TMI 48 - CESTAT, CHENNAI ] directed pre-deposit of 50% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company. There is a total demand of service tax of Rs.4,54,51,620/- along with interest and penalties for the period July 01 to March 11 on the amount collected by the applicant as finance charges for pre-closure/foreclosure of hire purchase on leasing transaction. 3. Heard both sides and perused the records. 4. The learned counsel submits that in some cases, the customers would like to pre-pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indusind bank Ltd. Vs CST Chennai 2010 (17) STR 565 (Tri.-Chennai) directed pre-deposit of 50% of tax. 6. After considering the submissions of both sides, we find that the Tribunal in the case of Housing and Dev. Corporation Ltd. (supra) held that service tax is leviable on foreclosure or pre-payment charges. In that case, Tribunal distinguished the case of Small Industries and Development Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground, the prepayment charges can never be considered to be in the nature of interest as prepayment only means payment before time. This should ideally result in refund of interest and not the demand for more interest because the borrowed money is being paid back before time. 7. Hence the applicant failed to make out a prima facie case for waiver of predeposit of entire amount of tax along with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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