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2020 (6) TMI 418 - AT - Service TaxDemand of service tax - amount earned for executing corporate guarantee in favour of their sister - non imposition of penalty for the preferential location charges recovered from the flat owners - Revenue alleges that the such activity is taxable under Banking and Finance Institution Services whereas the appellant is contesting that they are not liable to pay service tax on the said activity as they have not received any consideration for providing corporate guarantee to various banks on behalf of their associates - HELD THAT:- It is an admitted fact that the appellant has not received any consideration from either from the financial institutions or from their associates for providing corporate guarantee, in that circumstances, no service tax is payable by the appellant. Moreover, the demand raised in the show cause notices are on the basis of assumption and presumption presuming that their associates have received the loan facilities from the financial institution at lower rate, therefore, the differential amount of interest is consideration, but there is no such evidence produced by the revenue on that behalf. 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 demand of service tax on corporate guarantee provided by the appellant is set aside. Imposition of penalty - HELD THAT:- The charges leviable on account of prime location charges etc., the appellant has already paid service tax along with interest before issuance of the show cause notice. Therefore, in terms of Section 73(3) of the act, the proceedings were not required to be initiated against the appellant, therefore, penalty imposed on the appellant is set aside. Appeal allowed - decided in favor of appellant.
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