2019 (5) TMI 1246 - AT - Service Tax

CESTAT Allahabad: Guarantees for Company Loan Not Taxable as Business Support Services

Commissioner of Central Excise And CGST, Kanpur Versus M/s Mr. Irshad Mirza

The CESTAT Allahabad ruled in favor of the respondent, rejecting the revenue's appeal regarding taxability under 'Business Support Services' for ... Taxability - Business Support Services - HELD THAT:- We note that the issue involved in the present appeal is relating to taxability under ‘Business Support Services’ on guarantee issued by individual Director in his personal capacity for loan given by Banks to the Company and Company paying some commission to Director for the said guarantee being given. Learned Commissioner (Appeals) relying on Para 3.13 of letter dated 28/02/2006 issued by Joint Secretary TRU, Central Board of Excise & Customs, New Delhi has held that as clarified by C.B.E.&C. through said letter the present activity is not covered by ‘Business Support Services’ and therefore, he set aside the order passed by Original Authority confirming demand. There are no contention by Revenue in respect of non-applicability of said clarification issued through letter dated 28/02/2006 by Joint Secretary TRU, Central Board of Excise & Customs, New Delhi. Appeal dismissed - decided against Revenue. The appellate tribunal CESTAT Allahabad ruled in favor of the respondent in a case involving taxability under 'Business Support Services' on guarantees issued by an individual director for a company's loan. The tribunal rejected the appeal filed by the revenue, upholding the decision that the activity was not covered under 'Business Support Services' based on a clarification issued by the Central Board of Excise & Customs.