Case Law Details
Commissioner of CGST and Central Excise Vs Edelweiss Financial Services Ltd. (Supreme Court)
Assessee argued that issuance of corporate guarantee to a group company without consideration would not fall within banking and other financial services and is therefore not taxable service. He also read Section 65B (44) of the Finance Act 1994 to point out that the definition of service would indicate that it relates to only such service which is rendered for valuable consideration.
The revenue alleged that they have provided “banking or financial service” as corporate guarantee is like a bank guarantee. For period post July,2012, it was alleged that it is a “service” under section 65B(44) of the Finance Act. The demand of over Rs. 97 crores was proposed along with interest and penalties. The Commissioner dropped the proceedings holding that there is no consideration and valuation rules cannot be resorted to and hence, bank charges for bank guarantee cannot be deemed consideration.
The Revenue filed appeal before Hon’ble CESTAT, Mumbai. The CESTAT dismissed the appeal filed by the department.
The Revenue filed appeal before the Hon’ble Supreme Court. It was argued that similar matter in the case of DLF has been admitted. However, the Hon’ble Supreme Court dismissed the appeal filed by the department.
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