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October 2011

(2011) 23 STR 346 (Tri.-Del.) — State Bank of Indore v. Commissioner of Central Excise, Indore.

By Puloma Dalal, Jayesh Gogri
Chartered Accountants
Reading Time 1 mins
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Banking and other financial services — Exemption under Notification No. 29/2004-ST for tax on interest in relation to overdraft, cash credit, bill discounting or exchange — Allegation that condition of interest being separately shown in invoice not fulfilled.

Facts:
The appeal was filed the Bank challenging the adjudication order levying service tax and cess. The appellant had followed all RBI guidelines and the debit slips in all transactions clearly disclosed interest and other receipts. The Department contended that the conditions of Notification No. 29/2004-ST exempting interests on overdraft facility, cash credit facility or discounting of bills, bills of exchange or cheques in relation to banking services were not fulfilled as the interest amount was not shown separately in any invoice, a bill or a challan issued for the purpose.

Held:
Strict interpretation was unwarranted if it is established that the claimant squarely falls within the exemption zone. However, it was necessary to satisfy the authority through evidence. Accordingly, the appeal was disposed of with a direction to the appellant to adduce evidence as required by the Notification.

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