2009 (11) TMI 351

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....essee has been involved in the financing for the purchase of vehicles terming it as "hypothecation. finance" and the amounts charged from the customers was called as 'service charges' but no Service tax was paid on the interest portion of the charges received from the customers. Coming to such a conclusion that the finance and Hypothecation is also a taxable service, under the head "Finance leasing services including equipment leasing and the purchase under the category of "Banking and Other Financial Services". Show cause notices were issued for the recovery of the escaped Service tax and also for levy of interest and imposition of penalty. Adjudicating authority after considering the submissions made by the appellant before him and going ....

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..... The adjudicating authority has in last two para of his findings (pages 19 & 20 of the paper book) has distinguished the nature of documentation in the case of Hire purchase finance and lending activity carried on by the appellant. The adjudicating authority has also given a finding that even though the Ending activity became taxable with effect from 10-9-2004 on ac count of amendment to 65(12) , in view of the specific exclusion in Section 67, the interest on lending was not subject to Service tax. (b) The Commissioner initiated action under 84 revising the order in original and passed order in Revision 10/2007 dated 5-12-2007 in which interest earned was brought to tax and confirmed a levy of Rs. 158833/- towards Service tax in additi....

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.... squarely covered by the decision of the Bench in the case of Praveen Autofin (P) Ltd. v. CCE, Mangalore 2008 (10) S.T.R. 187 (Tri..) = 2008 (14) STT 149 (Bang. CESTAT). 4. Ld. DR on the other hand would reiterate the findings of the Id. Commissioner. 5. We have considered the submissions made at length by both sides and perused records. We find that the appellants are lending money as per the records available and receiving interest from their customers on such loans and this is undisputed. The period involved in this case is from 1-8-2003 to 30-9-2004. Revenue wanted to charge Service tax on such loans and interest thereon, as collected by appellant. The activity of lending finance was brought under the 5cr vice tax net by expanding....