Page 138 - GSTL_2nd July 2020 _Vol 38_Part 1

56 GST LAW TIMES [ Vol. 38
2020 (38) G.S.T.L. 56 (Tri. - Chan.)

IN THE CESTAT, REGIONAL BENCH, CHANDIGARH
[COURT NO. I]
S/Shri Ashok Jindal, Member (J) and Raju, Member (T)
DLF PROJECT LIMITED
Versus
C.C.E. & S.T., GURGAON-I
Final Order No. A/60890/2019-CU(DB), dated 21-10-2019 in Appeal
No. ST/61204/2018-DB
Corporate guarantee - Banking and Other Financial Institution services
- Corporate guarantee provided to banks/financial institution on behalf of
holding company/associated enterprises for availing loan or overdraft facility,
not taxable either prior to or after 1-7-2012 particularly when assessee not re-
ceived any consideration from said banks/financial institutions or from their
holding company/associated enterprises - Merely on the ground that such
holding company/associated enterprises received loan facility from said banks
at a lower rate, differential amount of interest to be considered as a considera-
tion, not acceptable - Sections 65(12), 65(105)(zm) and 65(105)(zzzl) of Finance
Act, 1994. [para 4]
Penalty proceedings not required to be initiated when Service Tax
with interest paid before issuance of show cause notice - Section 73(3) of Fi-
nance Act, 1994. [para 5]
Appeal allowed
REPRESENTED BY : Shri P.K. Mittal, Advocate, for the Appellant.
Shri H.S. Brar, Authorised Representative, for the
Respondent.
[Order per : Ashok Jindal, Member (J)]. - The appellant is in appeal
against the impugned order wherein service tax demand has been confirmed on
the presumption that the appellant has earned for executing corporate gaurantee
in favour of their sister concern, therefore they are liable to pay service tax, the
appellant has also sought non-imposition of penalty for the preferential location
charges recovered from the flat owners.
2. The facts of the case are that appellant is engaged in providing vari-
ous taxable services and are registered with the Department paying service tax
thereon. During the course of Audit, it was found that the appellant-assessee has
provided corporate guarantee to various banks/financial institutions on behalf of
their holding companies/Associate enterprises/Joint Venture and Other loan
facilities. The Revenue alleges that such activity is taxable under Banking and
Financial Institution Services whereas the appellant is contesting that they are
not liable to pay service tax on the said activity as they have not received any
consideration for providing corporate guarantee to various banks on behalf of
their associates. Further, the appellant has also collected certain charges on ac-
count of prime location of the flats and other relevant charges from the flat own-
ers but did not pay service tax, thereon, on pointing out by the Revenue, the ap-
pellant paid entire amount of service tax along with interest. Later on, a show

GST LAW TIMES  2nd July 2020  138