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TMI Blog2015 (1) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest on the overdraft or the credit. The interpretation made by the authority that exemption on account of interest is limited to the over draft facility and the cash credit and not on the amount while discounting the bills are not free from any doubt. The notification clearly provides for discounting of the bills to be exempted from the purview of the taxable services and, therefore, this Court does not accept the interpretation tried to be given to such notification by the Tribunal. - strong prima facie case has been made out by the petitioner for waiver of the amount pertaining to the service tax on the charges collected by the bank while discounting the bills. So far as the availment of CENVAT credit is concerned, according t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , passed by the Customs, Excise and Service Tax Appellate Tribunal, Kolkata, in an Appeal No. S.T. 74 of 2012 is assailed by the writ petitioner in this writ petition. A show cause notice was issued on the petitioner contemplating to initiate a proceeding for recovery of an amount on account of service tax so far as it relates to income from discounting of bills and the availment of CENVAT Credit. The petitioner bank replied to the said show cause notice and categorically asserts that the amount charged by way of an interest from the customers based on the credit limits is accounted under the head Interest on Bills and where there is no pre- sanctioned limit, when the bills are presented, the value of bill is credited to the customers ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocate for the Department interprets the said notification differently. According to him, the interest earned on discounting of bills, bills of exchange or cheques can only be exempted if it is done in relation to the over-draft facility or cash credit facility provided the same is shown separately in an invoice or bill or a challan. According to him, whatever the amount is received on discounting the bills it does not partake the character of an interest unless the conditions imposed on the said notification are strictly adhered to. He submits that the bank could not produce before the assessing authority the separate bills or the challan relating to the income from discounting the bills and, therefore, the authority have rightly denied the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in sub-rule (2). Sub-rule (2) provides for maintenance of a separate account to avail the CENVAT Credit. 6. This Court, therefore, finds that so far as the claim relating to the charges on discounting of the bills are concerned, the petitioner has shown the same in the separate account and treated the same as interest which is not eligible to service tax. 7. The meaningful reading of the notification dated 22-9-2004, prima facie, suggests that the discount earned on discounting of the bills, if shown separately, is exempted from the taxable services in equivalence to the amount of interest on the overdraft or the credit. The interpretation made by the authority that exemption on account of interest is limited to the over draft faci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an amount which relates to the bill discounting charges/interest to the tune of ₹ 11.02 crores are concerned; so far as the sum of ₹ 5.99 crores on account of wrong availment of the CENVAT is concerned, this Court does not find that the petitioner has been able to make out strong prima facie case for full waiver. 10. The portion of the impugned order by which the Tribunal directed the petitioner to deposit 50% of the duty levied on the taxable services is hereby quashed and set aside. 11. The petitioner is directed to deposit 50% of the duty imposed over the CENVAT credit within fortnight from date with the appropriate authority. Once the deposit is made by the petitioner-bank, the Tribunal is directed to take utmost steps ..... X X X X Extracts X X X X X X X X Extracts X X X X
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