9911796707
TMI Blog2015 (8) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... . During the course of verification of records, it was found that SKS had received not only interest amount on loans given to the borrowers but also amounts towards consideration received for the loan assets assigned to banking and financial institutions. 2. The definition of 'taxable service' under Section 65 (105) (zzzl) of Finance Act 1994 provides that 'taxable service' means any service provided or to be provided to a banking company or financial institution including a non-banking financial company or any other body corporate or a firm, by any person, in relation to recovery of any sums due to such banking company or financial institution, including a non-banking financial company, or any other body corporate or a fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest as the consideration for service provided by the appellant under the category of Recovery Agent Service, service tax of Rs. 34,24,93,571/- (Rupees Thirty Four Crores Twenty Four Lakhs Ninety Three Thousand Five Hundred and Seventy One only) for the period from 2007 to 2012 has been demanded and penalties also have been imposed besides demanding interest. 5. The learned counsel for the appellant made detail submissions and briefly stated the grounds submitted by him are as under: a) That the nature of the transaction is that of an actionable claim. b) That an actionable claim cannot be charged to service tax as a service since it stands on a totally singular platform of being an actionable claim distinct from that of goods and se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for which tax has been demanded it is clear that appellants have sold/transferred/assigned the receivables together with all other rights, benefits, powers, risk, obligations for an agreed consideration. SKS has no right whatsoever on the assets which stand transferred to the respective assignee bank. Therefore what becomes clear is that the appellant has no right whatsoever over the actionable claims and in such circumstances, the differential interest calculated and retained by the appellant on the actionable claim which no longer belongs to SKS and shown as provided by SKS has to be considered as consideration for acting as a receiver. 7. We have considered the submissions made by both the sides. There is no dispute that the loan given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest payable to the assignee and the interest charged to the women is the profit according to the appellant and service charges according to Revenue. From the above it can be seen that when the assignee appoints a different person as a servicer if service tax is payable, question arises why there should be a difference if the assignee himself acts as a servicer. We do not find any logic in taking a view that in such a situation assignee is not liable to pay tax. In the normal course when a loan is assigned, the consideration is paid by the assignee and that is the end. In this case the assignor collects the principal and interest and since they have received a loan from the bank equal to the amount or more than the amount of portfolio tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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