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TMI Blog2024 (5) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal in the latest decision in M/s.Pharmax Corporation Ltd. [ 2024 (3) TMI 1179 - CESTAT NEW DELHI] where it was held that 'The service provider shall be liable to pay service tax on the consideration which it receives for providing a taxable service. Any amount which is received but which is not a consideration for providing a taxable service is not exigible to service tax. Similarly, if a service is rendered, but no consideration is received no service tax can be charged. It is for the reason that if the consideration received is zero any percentage will be zero itself.' In the present case, it is found from the show cause notice, order-in-original and the impugned order that no consideration has been paid by the respondent i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent in lieu of corporate guarantee. However, for the period subsequent to 1.7.2012, amount of Rs.55,79,900/- for the period July, 2012 to April, 2015 was confirmed. On appeal by the appellant, the learned Commissioner dropped the demand for the period post 01.07.2012 on the ground that no consideration was paid by the respondent to ALI in lieu of corporate guarantee and hence cannot be brought into the net of Service Tax in terms of Section 65(44) of the Act read with Section 67 of the Act. The Revenue has challenged this in the present appeal before us. 3. The issue in the present case relates to the act of providing corporate guarantee to the respondent for grant of loan from the banks without any consideration can be subject to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided corporate guarantee on behalf of its sister concern to its lenders, who had not charged any commission or fee for providing guarantee and hence such activity is not chargeable to service tax. The observations made by this Tribunal in the latest decision in M/s.Pharmax Corporation Ltd. (supra) are quoted hereinbelow:- 8. There is no dispute that no consideration whatsoever was received by the respondent for the corporate guarantee which it had provided on behalf of its sister concerns and it has been explicitly recorded so in paragraph 14 of the show cause notice. The demand has been made only on a notional amount which, according to the Revenue, the respondent could have received had it charged its sister concern for providing the gua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee commission remitted by the petitioner to 6 ST/51967 OF 2018 the signatory entity and agency commission remitted for service provided by agents in respect of the export business of the petitioner . Thus, in both cases, a commission or other consideration was received for providing the taxable services and the dispute was whether service tax could be charged on such commission which is received. In the present case, we find from the show cause notice, order-in-original and the impugned order that no consideration has been paid by the respondent in lieu of the corporate guarantee and in view of the judicial pronouncements, we find no reason to distinguish the same in the facts of the given case. Consequently, we hold that no service tax is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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