2025 (6) TMI 1728

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....the appellants got themselves registered with the Service Tax Department. In the present case, the appellants had claimed the 'foreclosure charges' from their customers on account of pre-mature termination of the loan agreement, in the circumstances, when the borrower repaid the loan before the stipulated loan period. Similarly, the appellants had also claimed the 'seizure charges' from their customers, who had availed the loan towards purchase of the vehicles. In the situation, where the customer fails to repay the loan amount fixed under the Equal Monthly Installments (EMI) scheme, then the appellants seize the vehicles and for release of the vehicles, collect the seizure charges from the customers. On verification of the records maintain....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....l Services provided by the appellants. In other words, since foreclosure and seizure charges received by the appellants were no way connected to provision of any taxable service and such charges having been received by the appellants for non-fulfillment of the conditions itemized in the contract, that too, only on occasional basis in case of default in compliance to the agreed upon terms, in our considered view, such charges cannot form the part of the gross value of the taxable service, for the purpose of payment service tax thereon. We find that the judgements relied upon by the learned Advocate in the case Commissioner of Service Tax Etc. Vs. M/s Bhayana Builders (P) Ltd. - 2018 (2) TMI 1325 - SUPREME COURT; Union of India Vs. Interconti....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ciding the appeal filed by the Department against the aforesaid decision of the Tribunal, also explained the scope of Section 67 of the Act, both before and after the amendment, in the following words " The amount charged should be for "for such service provided": Section 67 clearly indicates that the gross amount charged by the service provider has to be for the service provided. Therefore, it is not any amount charged which can become the basis of value on which service tax becomes payable but the amount charged has to be necessarily a consideration for the service provided which is taxable under the Act. By using the words "for such service provided" the Act has provided for a nexus between the amount charged and the service provided.....