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2019 (9) TMI 122 - AT - Service TaxRCM - payment of guarantee fee towards receipt of Bank Guarantees - Banking and other Financial Services - the overseas service providers Dexia and Cordaid who had provided bank guarantee services to the appellant had provided Banking and other Financial Services - reverse charge mechanism - HELD THAT:- A plain reading of Section 65(12) shows that it covers various services including providing a bank guarantee by a banking company, financial institution or any other body corporate or commercial concern. It is true that Dexia and Cordaid are not banking companies but they have provided bank guarantees through Standard Chartered bank and through Robo, Netherlands, respectively to guarantee the borrowings by the appellant. Learned counsel argued that these are corporate guarantees and we are not convinced. These are not the guarantees provided by a corporation for it’s subsidiaries but are pure bank guarantees provided through banks by the service providers - the appellant received banking and financial services from abroad and is liable to discharge service tax under reverse charge mechanism. Extended period of limitation - period April 2009 to March 2012 - revenue neutrality - HELD THAT:- The entire demand is under reverse charge mechanism and if the appellant had paid the service tax under reverse charge mechanism, they would have been entitled to CENVAT credit of exactly the same amounts. Therefore, the revenue neutrality in this case is evident - the entire demand is hit by limitation and therefore needs to be set aside. Appeal allowed - decided in favor of appellant.
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