2023 (5) TMI 193

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.... Bank, Vasant Vihar. The said activity of the appellant was alleged amounting to provide the Banking and other Financial Services and a show cause notice No.3/2016-17 dated 13.04.2016 was served upon the appellant proposing the demand of Service Tax alongwith interest and the proportionate penalty for providing said service. The said proposal has been confirmed by the original adjudicating authority vide order No.667 of 14.09.2016. The appeal thereof has been rejected vide Order- in-Appeal No.1/2016-17 dated 12.05.2017. Being aggrieved, the appellant is before this Tribunal. 2. We have heard Mr. Krishna Mohan Menon, ld. Counsel for the appellant and Dr. Radhe Tallo, ld. Authorized Representative for the Department. 3. Ld. Counsel for the appellant has submitted that the appellant decided to provide corporate guarantee to its associate companies for grant of working capital loans to both of its companies. However, admittedly no consideration was received by the appellant either from the Bank /Financial Institution or from their associate enterprises for providing the said corporate guarantee. It is submitted that the decision of the authorities below is based on assumptions. T....

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.... (i) contract for lease is entered into between parties for leasing of a specific asset; (ii) such contract is for use and occupation of the asset by the lessee; (iii) the lease payment is calculated so as to cover the full cost of the asset together with the interest charges; and (iv) the lessee is entitled to own, or has the option to own, the asset at the end of the lease period after making the lease payment; (ii) Omitted (iii) merchant banking services; (iv) securities and foreign exchange (forex) broking, and purchase or sale of foreign currency, including money changing; (v) asset management including portfolio management, all forms of fund management, pension 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; and (viii) banker to an issue services; and (ix) other financial services, namely, lending, issue of p....

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....name, in the books of account of a person liable to pay Service Tax, where the transaction of taxable service is with any associated enterprise.] 7. The analysis of the definition of BOFS alongwith its taxability helps us to conclude that this definition is a comprehensive one instead of it being the inclusive one. It also clarifies that under service of BOFS only such persons can be made liable to service tax who can be classified in the category of being called as Banking/ non-banking Company, Financial Institutions, any other body corporate or a commercial concern. Above all, the definition carves out the list of category of the persons who would be excisable to tax under the category. Also the services provided by such persons which alone would be excisable to such taxes as have been comprehensively and specifically listed out as is apparent from the use of words "namely" / "means" in the said definition under section 65 (12) of the Finance Act. The present appellant do not fall under any of such categories/ lists, as there is no denial to the fact that appellant is not in business of financing, it is neither a banking nor a non-banking financial institute. Nor it is any oth....

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....n that follows is that consideration means a reasonable equivalent for other valuable benefit passed on by the promisor to the promisee or by the transfer of to the transferee. (v) Clearly, Section 67 of the Act deals with valuation of taxable services and intends to define what constitutes the value received by the service provider as "consideration" from the service recipient for the service provided. Implicit in this legislative architecture is the concept that any consideration whether monetary or otherwise should have flown or should flow from the service recipient to the service provider and should accrue to the benefit of the later. "Free supplies", incorporated into construction (cement or steel for instance), even on an extravagant inference, would not constitute a non-monetary consideration remitted by the service recipient to the service provider for providing a service, particularly since no part of the goods and materials so supplied accrues to or is retained by the service provider. Wherever a monetary consideration is charged for providing the taxable service and no non-monetary consideration forms part of the agreement between the parties, it is clause (i) ....