Corporate guarantee without consideration not taxable under service tax law; absence of fee or commission defeats the demand.

Service tax was not leviable on a corporate guarantee furnished by an overseas holding company where no commission, fee, or other consideration was received. The Tribunal applied the settled principle that taxable service value arises only when consideration is charged for the service, and found the record showed no payment in lieu of the guarantee. The demand therefore failed on merits, and the objections on extended limitation, interest, and penalty did not survive once taxability was negated.

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Issues: Whether service tax was leviable on corporate guarantee provided without consideration.

Analysis: The demand was founded on the respondent receiving corporate guarantee from its overseas holding company for obtaining bank loans. The settled line of decisions had held that service tax is chargeable only on consideration received for a taxable service, and that where no commission or fee is charged for furnishing the guarantee, the activity does not attract service tax. The record showed that no consideration was paid in lieu of the corporate guarantee, and the matter was therefore covered by the consistent judicial view relied upon by the Tribunal.

Conclusion: No service tax was leviable on the corporate guarantee provided without consideration.

Final Conclusion: The Revenue's challenge failed and the demand set aside in appeal remained undisturbed. The ancillary questions of extended limitation, interest, and penalty did not survive after the decision on merits.

Ratio Decidendi: Service tax on corporate guarantee is exigible only where consideration is received for the service; in the absence of consideration, no taxable value arises.

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