Small Industries Dev. Bank of India v. Commr. of S.T., Ahmedabad

[Order per : M.V. Ravindran, Member (J)]. - When this Stay Petition was called out, ld. Counsel submits that the appellant has already deposited entire amount of Service Tax liability, interest thereof and 25% of the Service Tax liability as penalty and is contesting the issue on merit.

2. It is his submission that in the appellant’s own case, Delhi Bench of the Tribunal vide Final Order dated 20-1-2011 [as reported at (Tri.-Del.)] has held in their favour of non-taxability of the amount received as pre-payment and re-payment charges of the loan settled prior to their maturity. He would fairly submit that this Bench in the case of Housing & Development Corporation Ltd. (HUDCO) vide Final Order dated 25-11-2011 [as reported at (Tri.-Ahmd.)], has taken a different view by distinguishing the said decision of the co-ordinate Bench of the Tribunal. It is his submission that since there are two conflicting views, the matter may be referred to Larger Bench, for which proposition, he relies on the judgment of the Apex Court in the case of C.C.E., Mumbai v. Mahindra & Mahindra Ltd. - 2014-TIOL-71-SC-CX = (S.C.).

3. Ld. D.R. fairly submit that two different views have been expressed on the very same issue.

4. On perusal of the records, we find that the tax liability has been confirmed on the ground that the appellant has accepted pre-payment charges towards the settlement of the loan extended to their customers. We find that in the appellant’s own case, the co-ordinate Bench of the Tribunal has taken a view holding that such activity of fore closure of the loan does not attract Service Tax liability. This Bench in the case of HUDCO has taken a diagonically opposite view after considering the judgment in the case of Small Industries & Development Bank of India (supra). Since there are two different views expressed by two different Benches, we are constrained to refer the matter to Hon’ble President for constituting a Larger Bench to decide as to which view is correct.

5. Registry is directed to place the file before Hon’ble President along with the case laws as referred to hereinabove.

6. Since the appellant has already deposited the amount of Service Tax liability, interest and 25% of the tax liability and as we have referred the matter to Larger Bench, we consider the amount deposited by the appellant as enough deposit to hear and dispose the appeal on merit. Accordingly, application for waiver of pre-deposit of the balance amounts involved is allowed and recovery thereof stayed till the disposal of appeal.

(Dictated and pronounced in Court)