9911796707
TMI Blog2007 (7) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... 003 - - - Dated:- 30-7-2007 - JUDGEMENT : A short question which arise for determination in this batch of civil appeals is: whether the Tribunal was justified in holding that an amount representing rediscounting interest paid on promissory note/bill did not accrue or arise to the assessee-bank by reason of diversion of such discount through overriding title in favour of Industrial Development B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Scheme of rediscounting by IDBI. The Bills Rediscounting Scheme was introduced in April, 1965, in terms of the powers vested in the IDBI under Section 9(1)(b) of its statute, which authorized IDBI to accept, discount or rediscount bills of exchange, promissory notes of industrial concerns. The object of the Scheme is two-fold, i.e., to increase the sales of indigenous machinery/capital equipme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acilities from IDBI, cannot charge the seller/manufacturer discount at a rate higher than the rate prescribed by IDBI. The seller/manufacturer is also prohibited from charging interest for the deferred payment at an amount higher than the amount paid to the bank. IDBI under Scheme has a right to refuse rediscounting of bills of such sellers/manufacturers who do not comply with the requirements u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in payment thereof from the acceptor/guarantor of the bills/pro-notes. Under the Scheme, the primary responsibility for payment to IDBI is placed on the seller's bank which in the present case is the assessee-bank. Therefore, the rediscounting charges of IDBI collected by the assessee-bank cannot be "chargeable interest" under Section 2(7) of the 1974 Act since even before the said amount could ..... X X X X Extracts X X X X X X X X Extracts X X X X
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