‘Withholding exemption and demanding service tax was grossly illegal’; CESTAT sets aside order demanding service tax on interest earned on Overdraft and Cash Credit facilities
The Tribunal noted that Rule 4A (1)(i) of Service Tax Rules, 1994 requires disclosure of service tax payable on the value of service provided, thus, it cannot include exempted services. Moreover, a proviso inserted to the Rule by an amendment cannot enlarge the scope of the provision, at best it is only clarificatory.
