TaxTMI 
TaxTMI 
2026 (9) TMI 1672
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....ereinafter referred to as "the impugned order") passed by the Principal Commissioner of Service Tax-I, Chennai (hereinafter referred to as "the Impugned order"). 2. The facts, as briefly stated, are that the appellant, a non-banking financial company engaged in factoring services and registered under the taxable category of Banking and Other Financial Services, claimed exemption under Notification No.29/2004-ST dated 22.09.2004 in respect of discounting/bank charges. Pursuant to departmental audit, SCN No.386/2010 dated 26.07.2010 was issued proposing demand of service tax of Rs.21,33,22,120/- for the period October 2006 to March 2009, followed by further SCNs/Statements of Demand for subsequent periods on the same issue. The appellant m....
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.... No.29/2004-ST dated 22.09.2004 expressly exempts, in relation to discounting of bills, bills of exchange or cheques, the amount equivalent to the interest on such discount, subject to prescribed conditions. The appellant's monthly statements separately reflected factoring charges, discount charges and bank charges. It was therefore contended that merely because the appellant internally accounted for cheque-discounting charges under the nomenclature "Bank Charges", the substantive character of the receipt could not be altered. 3.3 Without prejudice, Smt. Vijayalakshmi, Representative of the Appellant Bank submitted that the Department itself had described the bank charges as expenses recovered from clients on a reimbursable basis. Su....
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....007 dated 25.06.2008, the SCNs/SODs, the appellant's correspondence and the ledger records. The issues for determination are whether the Bank Charges of Rs.10,33,215/-, on which service tax of Rs.1,26,841/- was confirmed, are taxable receipts and whether the extended period and penalty under Section 78 are sustainable. 6. The earlier Order-in-Original No.2/2007 dated 25.06.2008, though relating to an earlier period, is relevant regarding the appellant's accounting practice. After examining the appellant's records, the Department had accepted that the bank charges represented interest relating to cheque discounting, were separately accounted for and were reflected in the statements furnished to clients, and had dropped the pro....
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....laid down by the Hon'ble Supreme Court in Union of India v. Intercontinental Consultants & Technocrats Pvt. Ltd., 2018 (10) G.S.T.L. 401 (S.C.), also supports exclusion of reimbursable expenses from taxable value for the relevant period. 9. We therefore hold that the Revenue has failed to establish the taxable character of the confirmed Bank Charges and the demand of Rs.1,26,841/- is unsustainable on merits. 10. The extended period is also not invocable. The appellant's books and ledgers contained the relevant entries, the issue was examined during departmental/CERA audit, and the same accounting practice had earlier been considered by the Department in OIO No.2/2007. There is no evidence of deliberate suppression, wilful miss....