2023 (8) TMI 253

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....e sheet of the appellant appears to have revealed the receipt of Rs.9,91,954/- and Rs.4,42,174/- for the periods 2007-08 and 2008-09 respectively. 2. Upon enquiry, the Department appears to have found that the appellant was making payments to their suppliers only after sixty days and if the supplier wanted earlier payment, 5% of the value of the bill was deducted by the appellant, which was shown in the appellant's balance sheet as income under "Bill discount". 3. From the above, the Revenue entertained a doubt that the appellant did render service within the meaning of Section 65(12)(a)(ix) read with Section 65(105)(zm) of the Finance Act, 1994 and thus, a Show Cause Notice dated 19.06.2009 was issued proposing to demand Service Tax ....

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....ale, is not a 'service' and hence, there was no taxability. • The lower authority does not specifically spell out as to how the service is involved in a bill discounting scheme. • In a bill discounting scheme, there is no service by the seller to the buyer nor is there any service by the buyer to the seller and therefore, neither the seller nor the buyer could be the service provider or service receiver. • The appellant is not initiating the bill discounting scheme as a service provider as contemplated under Section 65(12)(a)(ix) ibid. since no consideration was received by them. • The appellant had only availed the facility of discount against prompt payment, which is a direct facility gi....

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.... non-banking financial company or any other body corporate [or commercial concern], namely :- (i) ... . . . (ix) other financial services, namely, lending, issue of pay order, demand draft, cheque, letter of credit and bill of exchange, transfer of money including telegraphic transfer, mail transfer and electronic transfer, providing bank guarantee, overdraft facility, bill discounting facility, safe deposit locker, safe vaults; operation of bank accounts;" 13.1 The transaction/activity, as explained by the appellant in its reply to the Show Cause Notice is that: - "... discounts granted to the buyer as per the bill discounting scheme are in the nature of cash discounts or prompt paym....