TMI Blog2019 (9) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia. They also entered into a similar agreement guarantee agreement with M/s Cordaid, Netherlands [Cordaid] as per which Cordaid would place and pledge a deposit with M/s Rabo India Finance Private Ltd [Rabo India for short] by means of a guarantee from Rabo Netherland. In lieu of this guarantee, the appellant paid a guarantee fee to Cordaid. Pursuant to an audit of the appellant s records for the period October 2008 to March 2013, a show-cause notice dated 17.10.2014 was issued to the appellant covering the period April 2009 to March 2012 demanding service tax of ₹ 29,21,803/- along with interest on the guarantee fees paid by the appellant to M/s Dexia and M/s Cordaid. It is the case of the department that the overseas service provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion fund management, custodial, depository and trust services, (vi) advisory and other auxiliary financial services including investment and portfolio research and advice, advice on mergers and acquisitions and advice on corporate restructuring and strategy; (vii)provision and transfer of information and data processing; (viii)banker to an issue services; and (ix) other financial services, namely, lending, issue of pay order, demand draft, cheque, letter of credit and bill of exchange, transfer of money including telegraphic transfer, mail transfer and electronic transfer, providing bank guarantee, overdraft facility, bill discounting facility, safe deposit locker, safe vaults, op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y not covered under the definition of banking and other financial services. Her second line of argument was that they were audited before the show-cause notice was issued therefore it cannot be held that they had suppressed any facts. Their operations were in the knowledge of the department and they cannot be alleged to have suppressed any facts or wilfully misstated any facts with an intent to evade payment of duty. Thirdly, she would argue that the entire demand is under reverse charge mechanism and they themselves are registered with the service tax and have been availing the benefit of CENVAT credit. If any service was taxed under reverse charge mechanism, they will be entitled to the benefit of CENVAT credit of the service tax paid. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assures that if the appellant defaults in payment to M/s Stndard Chartered Bank or to M/s Robo India, the guarantor company will indemnify the banks against such loss. The case of Sterlite Industries Ltd Vs CCE [2019 (2)TMI 1249 (CESTAT-Madras)] relied upon by the learned counsel for the appellant does not apply in this case because in the case of Sterlite Industries, the company was providing guarantee to it s own subsidiaries and there was no bank involved in there. Therefore, the nature of guarantee provided was that of corporate guarantee and not a bank guarantee. As opposed to these cases, in the present case Standard Chartered Bank, London has provided a guarantee to Standard Charted Bank India at the behest of M/s Dexia and M/s Dexia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... echanism. 6. However, we find that the demand is for a period April 2009 to March 2012 and the show-cause notice was issued invoking extended period of limitation on 17.10.2014. 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. It has been well settled at the hands of the Apex Court in the case of Jet Airways (supra) that extended period of limitation cannot be invoked in revenue neutral cases. Therefore, the entire demand is hit by limitation and therefore needs to be set aside The impugned order is set aside and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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