2014 (12) TMI 84

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..... ee herein is having the service tax registration for rendering services of Banking and Financial Service and Business Auxiliary Service. The Revenue issued a show cause notice on 17-2-2009 and 6-10-2009, alleging that, the assessee had not paid the service tax on the charges collected for the cheques dishonoured, from the customers during September, 2004 to June, 2008 and July, 2008 to June, 2009 for an amount of Rs. 2,17,06,121/- and Rs. 24,87,554/- respectively. The notice also stipulated the interest to be levied under Section 75 and the penalty under Sections 76 and 78 of the Finance Act, 1994. The assessee resisted the proceeding by filing objection contending that the charges Collected on the dishonour of the cheques, were penal in ch .....

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..... stoms, Excise and Service Tax Appellate Tribunal (CESTAT) and filed an application seeking dispensation of the payment, of the liability demanded. The Tribunal considered the case of the assessee and ultimately, held that a direction to deposit a sum of Rs. 1 crore within eight weeks would meet the ends of justice. Aggrieved by this, the present appeal by the assessee. 4. A reading of the order of the CESTAT would show that they considered the case of the assessee on the prima facie point raised. The Tribunal pointed out that the assessee committed serious irregularity by taking Cenvat Credit on the service, the cost of which was separately billed to the customer without service tax component. The Tribunal further pointed out that the .....

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..... (cited supra), had already struck down the above said rule, the Tribunal, failed to consider the prima facie case made out by the assessee and consequently, the order needs to be set aside. He further pointed out that irrespective of the charges collected from the customers, which are reimbursable in nature, they also suffered tax at the hands of the bank, and hence they are entitled to claim Cenvat credit. In any event, this was not in issue at all before the lower authorities and it is for the Tribunal to consider it while dealing with the appeal. In the circumstances, the learned Counsel would seek to set aside the order of the Tribunal so as to have total waiver. 6. As regards the financial hardship pleaded by the assessee, the af .....

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