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TMI Blog2024 (7) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... ntative on the 'non-monetary benefits' which may, if at all, be of relevance for determination of assessable value under section 67 of Finance Act, 1994 does not extend to ascertainment of 'service' as defined in section 65B(44) of Finance Act, 1994. 'Consideration' is the recompense for the 'contractual' undertaking that authorizes levy while 'assessable value' is a determination for computing the measure of the levy and the latter must follow the former.' In the present case admittedly neither any service was provided by the appellant to the HIL nor any consideration was received. Therefore accordingly the ingredients of Section 66 and 67 of the Finance Act, 1994 are not available for charging service tax. The appellant has also relied upon on larger bench judgment of this tribunal as in the case of Commissioner of Service Tax Vs. Bhayana Builders P Ltd. [ 2018 (2) TMI 1325 - SUPREME COURT] as per which was upheld by the Supreme Court wherein the relevant para of the said decision from the above judgment also settled that when involvement of any considering the service tax cannot be charged. Since no consideration is involved in the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral excise department culminated into issuance of three show cause notice by the department wherein the department made similar allegations against the appellant. The appellant was liable to pay service tax of 50 PMT on the handling of Sulphuric Acid as Cargo Handling Charges. The show cause notice have been adjudicated vide 2 years in original dated 31.03.2016 and 28.03.2018. Being aggrieved by the said Orders-In-Original appellant preferred appeal before the learned Commissioner (Appeals ) who upheld the Orders In Original. Therefore, the appellant being aggrieved by the said Orders-In-Original as preferred the present appeal. 2. Shri Jigar Shah learned Counsel appearing on behalf of the appellant along with Miss Raksha Bhandari at the outset submits that from the minutes of the meeting between the appellant and Ms. Hindalco Limited, it is clear that the appellant having stop charges 50 MPT for the Cargo Handling Charges as Sulphuric Acid from the factory of HIL. Therefore, neither service involved nor any consideration. Accordingly, in absence of any consideration no services can be demanded. He placed reliance on the following Judgments:- Commissioner of CGST and central exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the record. We find that to know exact fact about the impugned judgments between the appellant HIL to minutes of the meeting dated 01.03.2006 is very fact. Hence, the same is stand below : - From the above minutes of meeting held between the appellant and Ms. Hidalco Industries Ltd.- Unit Birla Copper. It is found that prior to 01.03.2006 the appellant charging 50 PMT for handling of Sulphuric Acid but due to the reason that the Ms. HIL has installed pipeline for handling of Sulphuric Acid it was mutually decided to stop the charges of 50 PMT by the appellant Hindustan Hindalco Industries Limited. With this minutes of the meeting it is clearly revealed that the appellant has stopped providing service of handling Sulphuric Acid and for the same reason they also stopped charging to the Ms. HIM therefore, neither any service involved nor any transaction considering against such service. In this regard it is relevant to read the various provisions of the Finance Act, 1994. According to which an activity to come under the ambit of service, one of the necessary condition required to be fulfilled is that there should be flow of consideration from the service recipient to the service p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no specific enumeration as 'other financial services' therein, till 20th June 2012 and that for the period thereafter, absence of 'consideration' for facilitating 'corporate guarantee' excluded such activity from coverage within the definition of 'service' in section 65B(44) of Finance Act, 1994. The respondent, M/s Edelweiss Financial Services Ltd, has filed a memorandum of cross-objections which is also taken up for disposal in the present proceedings. 2. Learned Authorised Representative, relying upon the grounds of appeal, submits that the characteristics of 'corporate guarantee' is not dissimilar to 'bank guarantee' and, thereby, liable to tax in like manner. He further contends that the as 'corporate guarantee' is very much within the reporting system established by the Reserve Bank of India in master circular dated 1st July 2013 (at paragraph 2.3.8.6), it is nothing but 'financial services' for the purpose of Finance Act, 1994. It was also contended that the discarding of the decision of the Tribunal in Kaveri Agri Care Pvt. Ltd. v. Commissioner of Service Tax, Mysore [2011 (22) S.T.R. 220 (Tri. - Bang.)] is ina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by a corporation for it's subsidiaries but are pure bank guarantees provided through banks by the service providers. Therefore, on merits, we find that the appellant received banking and financial services from abroad and is liable to discharge service tax under reverse charge mechanism.' which runs counter to the proposition put forth on behalf of Revenue. 6. The exclusion of 'corporate guarantee' extended by a holding company for the business activities of its subsidiary companies from the ambit of levy stands decided by the Tribunal In re DLF Cyber City Developers Ltd.. It is also clear that, even if 'corporate guarantee' is, in practice, akin to 'bank guarantee', the definition of 'banking and other financial services', viz. '(a) the following services provided by a banking company or a financial institution including a non-banking financial company or any other body corporate or [commercial concern]*, namely :- xxxxx (ix) other financial services, namely, lending, issue of pay order, demand draft, cheque, letter of credit and bill of exchange, transfer of money including telegraphic transfer, mail transfer and electronic transfer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for computing the measure of the levy and the latter must follow the former. 10. In view of the settled law as enumerated supra and the inevitability of consideration as manifesting 'taxable service', we find no merit in the appeal of Revenue which is dismissed. Cross-objection is also disposed off. In view of the above judgment this settled by the Hon ble High Court that if there is no consideration no service tax can be charged on that. We further observed that Section 66 of the Finance Act is the charging Section and it provides that - there shall be levied a tax at the rate of . on the value of taxable services referred in-sub clauses . of clause 105 of section 65 and collected in such manner as may be prescribed. Thus, the tax shall be levied on the value of taxable service . Further, value of taxable service is defined as per Section 67 of 1994 which is reproduced herein below :- 67. Valuation of taxable services for charging service tax (1) Subject to the provisions of this Chapter, service tax chargeable on any taxable service with reference to its value shall, - (i) in a case where the provision of service is for a consideration in money, be the gross amount c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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