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2023 (10) TMI 1089 - AT - Service TaxLegality of issuing SCN and levy of penalty - service tax paid before the issuance of show-cause notice - levy of service tax under Banking and Other Financial Services on their act of providing bank guarantees to their group companies. Issuance of SCN and levy of penalty - HELD THAT:- Section 73 (3) provides that the Central Excise Officer shall not serve any notice under sub-Section 1 of Section 73 where the assessee pays the service tax. The only exception to such non-issuance of show-cause notice is provided under sub-Section 4. Sub-Section 4 is attracted when the elements like fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of this Chapter or of the Rules made there under with intent to evade payment of service tax - the Courts and Tribunals have been consistently holding that mere non-obtaining registration, nonpayment of service tax and non-filing of ST-3 Returns cannot be a reason to allege suppression etc. and that a positive act on the part of the assessee with intent to evade payment of tax has to be established. Looking into the facts and circumstances of the case, the extended period is not invocable and hence, penalty cannot be imposed on the service tax which stands paid before the issuance of show-cause notice. Levy of service tax under Banking and Other Financial Services on their act of providing bank guarantees to their group companies - HELD THAT:- The Department has not adduced any evidence to the effect that the appellants have received any consideration in providing bank guarantees. This Bench in the case of appellant’s group company in M/S DLF PROJECT LIMITED VERSUS C.C.E & S. T- GURGAON I [2020 (6) TMI 418 - CESTAT CHANDIGARH] have decided the issue in their favour holding that the appellant is not liable to pay any service tax on corporate guarantee provided by the appellant to various banks/financial institutions on behalf of their holding company/associate enterprises for their loan or over draft facility under Banking and Financial Institutions after or before 01.07.2012. The appeal id allowed.
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