TMI Blog2024 (3) TMI 1179X X X X Extracts X X X X X X X X Extracts X X X X ..... iding taxable services. In other words, there must be a service provider, a service recipient, a taxable service and a consideration. The service provider shall be liable to pay service tax on the consideration which it receives for providing a taxable service. Any amount which is received but which is not a consideration for providing a taxable service is not exigible to service tax. Similarly, if a service is rendered, but no consideration is received no service tax can be charged. It is for the reason that if the consideration received is zero any percentage will be zero itself. In the case of OLAM AGRO INDIA LTD VERSUS COMMISSIONER OF SERVICE TAX [ 2013 (11) TMI 1503 - CESTAT NEW DELHI] it is recorded a show cause notice dated 03.04.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of audit and scrutiny of balance sheets, it was found that the respondent had provided corporate guarantee on behalf of its sister concerns to lenders but had not charged any commission or interest or fees for providing the guarantee. It is the case of the Revenue that had the sister concerns approached other banks or institutions to obtain a guarantee of equivalent amount, the banks would have charged them certain fees. Such fees would have been taxable at the hands of the banks under the category of Banking Financial Services . Therefore, even though the respondent had not received any consideration for the corporate guarantees which it had provided, a notional value equivalent to the amount which banks could have charged for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r may be restored for the following reasons : (a) The Tribunal held that in the following extended corporate guarantees would fall under Section 65 (12) of the Finance Act, 1994 i.e. under Banking financial Services. (i) Kaveri Agricare versus CST, Mysore 2011 (22) S.T.R. 220 (Tri. Bang.) ; (ii) Olam Agro versus CST, Delhi I 2014 (33) S.T.R. 251 (Tri. Del.) (b) the consideration received by one entity for providing corporate guarantee to the other is classifiable under Banking Other Financial Services under Section 65 (12) of the Finance Act, 1994. (c) Therefore, the Commissioner (Appeals) erred in setting aside the demand relying on certain other decisions. 6. Learned consultant for the respondent fully supports the impugned order and asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gone through the two case laws relied upon by the learned authorized representative. It is being explicitly recorded in Kaveri Agricare that the demand is on account of consideration received by the appellant for providing the above corporate guarantee during the material period . Similarly, in the case of Olam Agro it is recorded a show cause notice dated 03.04.2012 was issued covering the period October 2010 to 31.12.2011 proposing levy of service tax, interest and penalties for corporate guarantee commission remitted by the petitioner to the signatory entity and agency commission remitted for service provided by agents in respect of the export business of the petitioner . Thus, in both cases, a commission or other consideration was recei ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
