9911796707
TMI Blog2017 (11) TMI 1333X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the appellant-assessee is exclusive of interest and other charges. However, interest for the month is also shown separately. Hence, the claim that "finance charge" and "additional finance charge" are interest is not correct. Such transaction between the appellant-assessee and the customer being not one of lending loan, the question of exclusion of Interest on Loan in terms of Board's Circular dated 17.09.2004 does not arise. In terms of agreement between the oil companies and the appellant-assessee, it is clear that the Fleet Card holder enjoys various privileges - the "finance charge" and "additional finance charge" are to form part of taxable value for taxable service of BOFS/Credit Card Services during the material period. Ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble income by the appellant. The Fleet Card issued by the appellant to the customer, who availed vehicle loan facilities from them, is for facilitating the customers to procure fuel from the outlets of petroleum companies, with whom the appellant-assessee had prior arrangement. These cards carry pre-paid facility as well credit facility. The creditworthiness of the customers verified and cards were issued by the appellant in their trademark as well as that of oil companies. The cards provide credit facilities for purchasing fuel for the vehicle of the customer. The appellant receive considerations from the customers under each category. They were discharging service tax on these income except in respect of finance charges and additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates that Interest on Loans is not to be included in the assessable value. The income now being subject to service tax is nothing but Interest on Loans given to the customers of the appellant. Referring to the definition in Black's dictionary, the learned counsel submitted that finance charge is nothing but an additional payment in the form of interest, paid by a retail buyer with the privilege of purchasing goods or services in installments. The customer of the card issued by the appellant-assessee purchases fuel from petrol station and the appellant pays to the oil company on their behalf. Till the card holder pays up the money to the appellant, they are 'Debtors' and they stand in the shoes of borrowers. In other words, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest is also known. It is submitted that the present transaction is not a loan transaction. 5. On the appeal by the Revenue, learned Special Counsel Shri N. Rajagopalan submitted that the Commissioner (Appeals) fell in error in concluding that the transactions are loan transactions and what is accruing as finance charge to the appellant-assessee is nothing but interest. He submitted that upon such wrong reasoning, the appellate authority dropped the demand relying on Circular dated 17.09.2004 of the Board, which specified that Interest on loans are specifically excluded for valuation under section 67 of the Finance Act, 1994 6. We have heard both sides and perused the appeal records. 7. The dispute in the present case r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in agreement with such finding. As observed by the original authority, the loan is a prearranged specific amount given at one-time or in instalments. However, in Fleet Card System , the same credit limit is extended every fortnight and sometimes even remains unutilised. Fleet Card function cannot, therefore, be treated on par with a loan transaction. As per clarification of the Board's Circular dated 09.07.2001, interest charges are also includible in the taxable value as payment for services rendered under Credit Card Services. Credit card services also specifically found entry in the Banking and Other Financial Services [in short BOFS ] prior to 15.04.2006. Thereafter, a separate entry was created for such Credit Card Services. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to form part of taxable value for taxable service of BOFS/Credit Card Services during the material period. 10. In view of our above discussion, holding that the original authority is correct in determining the tax liability against the appellant -assesseee, for the same reason, we hold that the Commissioner (Appeals) order is not sustainable. Accordingly, the appeal by Revenue is to be allowed by setting aside the impugned Commissioner (Appeals) order. 11. The appellant-assessee contested the first demand on limitation also, along with imposition of penalty under section 78. We note that the question involved in the present case is one of interpretation and as can be seen even by order of Commissioner (Appeals), the possibility o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
