2016 (12) TMI 290

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....Revenue has taken the view that service tax is liable to be paid on such discount amounts received by the appellant. They have also denied the benefit of the Notification No. 29/2004-ST dated 22.9.2004. Both the authorities below have confirmed the demand of service tax to the extent of Rs. 11,01,930/- along with interest chargeable under Section 75 as far as imposition of penalties under Sections 77 and 78 of the Finance Act, 1994. 2. Appeal against the impugned order is mainly on the following grounds: (i) The appellant is engaged in the manufacture of excisable goods falling under Chapter 56 of the Central Excise Tariff Act. They are not engaged in the business of banking or financial services. Their submission is that levy of service....

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....cility, safe deposit locker, safe vaults; operation of bank accounts: 5. In the activity of bill discounting, the appellant has performed the role of lender by paying the discounted amount to the seller of the goods and subsequently recovering the full amount of the bill of exchange from the borrower. The consideration received by the appellant for this transaction is the difference between the amount of the bill of exchange received by them from the borrower and the amount paid to the seller of the goods. The appellant claims that this difference is in the form of interest received by them for advancing the amount to the seller, it can also be described as discount. 6. The case of the appellant is that service tax becomes payable on this....