https://www.taxtmi.com/caselaws?id=766193 CESTAT Mumbai dismissed the appeal regarding CENVAT credit on service tax paid for loan pre-payment penalties. The Tribunal held that pre-payment premiums/foreclosure charges do not constitute a separate banking service but represent compensation to banks for lost interest income. Following the Larger Bench decision in Repco Home Finance Ltd., the Tribunal ruled that service tax cannot be levied on foreclosure charges under banking and financial services category. Since no service tax is payable on such charges, CENVAT credit is inadmissible under Rule 3 of CENVAT Credit Rules, 2004. en-us Tue, 11 Feb 2025 00:00:00 +0530 Thu, 20 Feb 2025 08:02:31 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=766193 CESTAT Mumbai dismissed the appeal regarding CENVAT credit on service tax paid for loan pre-payment penalties. The Tribunal held that pre-payment premiums/foreclosure charges do not constitute a separate banking service but represent compensation to banks for lost interest income. Following the Larger Bench decision in Repco Home Finance Ltd., the Tribunal ruled that service tax cannot be levied on foreclosure charges under banking and financial services category. Since no service tax is payable on such charges, CENVAT credit is inadmissible under Rule 3 of CENVAT Credit Rules, 2004. Case-Laws Central Excise Tue, 11 Feb 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=766193