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TMI Blog2014 (12) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Appellant : Nihal Kothari, CA with Ms. Prajakta Menezes, CA & Shri S S Gupta, CA For the Respondent : Shri P M Saleem, Commissioner (AR) JUDGEMENT Per: Ashok Jindal: The applicant namely HDFC Bank Ltd. and ICICI Prudential Life Insurance Co. Ltd. are seeking waiver of pre-deposit of the demands confirmed by way of the impugned order. As the issue involved in both stay applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ittedly, if the value of the securities is Rs. 100/-, the lender shall pay certain amount e.g. Rs. 10/- as their charges for lending and remaining Rs. 90/- they lend to the borrower. For that CCIL issue a certificate certifying the amount of security amount lended and the charges. After the maturity period, the borrower will pay the amount written on the face value of the security. In case of defa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Therefore, prima facie the amount of charges retained by the lender constitute as interest on loan. In these circumstances, the applicants are not required to pay service tax. 6. Another issue for demand of service tax is that the applicant, HDFC Bank Ltd., discounts the account receivable (invoice) of their client and at the time of maturity, they get full value of the amount of the invoice. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discount is nothing but interest for lending the money. Therefore, the applicants have made out a case for complete waiver of pre-deposit on this issue. 8. The third demand has been confirmed against HDFC Bank Ltd. for charging penal interest on bills of exchange discounted by them. The revenue is of the view that penal interest recovered by the appellant is not interest on loan. Therefore, they ..... X X X X Extracts X X X X X X X X Extracts X X X X
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