2025 (10) TMI 393

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....r-in-Original. 2. Briefly stated facts of the present case are that the appellant is registered with the Service Tax department. During the course of audit of the records of the appellant for the FY 2012-13 to 2014-15, it was noticed that the appellant had given Corporate Guarantee to M/s Kotak Mahindra Bank Limited and M/s HDFC Bank Limited for credit/overdraft facility sanctioned to their associated enterprises i.e. M/s Enkay HWS India Pvt Ltd and M/s Enkay Brand Distribution Pvt Ltd, but had not paid applicable service tax. On these allegations, a show cause notice dated 14.09.2016 was issued to the appellant proposing to demand service tax amounting to Rs.3,31,145/- on account of 'Banking and Other Financial Services' for Corporate G....

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....ces. 4.3 He further submits that the issue involved in the instant case is no more res integra and has been decided in the following cases: • CCE & CGST vs. M/s Edelweiss Financial Services Ltd - 2023 (4) TMI 170 - SC • Huawei Telecommunication India Co Pvt Ltd vs. CCE & ST, Rohtak/Gurgaon-I - 2025 (5) TMI 155- CESTAT Chandigarh • Principal Commissioner of Central Tax, New Delhi vs. M/s Sindhu Trade Linkers - 2023 (11) TMI 890 - CESTAT New Delhi 4.4 He further submits that if an activity is not for consideration, it is no service and service tax is not leviable on it. In this regard, he relies on the decision of the Tribunal in the case of Sri Chaitanya Educational Committee vs. CCE & ST, Guntur ....

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....(iv) as at Para 19 above, as to whether the appellants were required to pay service tax of Rs 10,69,70,856/- plus Rs 3,96,38,520/- along with interest and penalty on the reverse charge mechanism, on the Banking and other Financial Services, for the Corporate Guarantee given by the Overseas Associate Enterprises to Banks, during the period 2010-11 to 2014-15, on behalf of appellant, we find the adjudicating authority finds that the term banking and other financial services in Section 65(12) encompasses various services including bank guarantee; Function of bank guarantee is akin to corporate guarantee; the activity/transaction involves benefits to Huawei and in the absence of this activity/transaction; it would have incurred certain costs. H....

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....at their associates have received the loan facilities from the financial institution at lower rate, therefore, the differential amount of interest is consideration, but there is no such evidence produced by the revenue on that behalf. In that circumstances, we hold that the appellant is not liable to pay any service tax on corporate guarantee provided by the appellant to various banks/financial institutions on behalf of their holding company/associate enterprises for their loan or over draft facility under Banking and Financial Institutions after or before 01.07.2012. 5. In view of this, we set-aside the impugned order qua demand of service tax on corporate guarantee provided by the appellant. We further take note of the fact that ....