HEMAMBIKA R. PRIYA

The present appeal has been filed M/s ACB India Limited¹1 the appellant to assail the impugned Order-in-Original No. 09-10/TPS/PC/CGST/DSC/2020-21 dated 01.09.2020 wherein the Commissioner confirmed the demand of service tax amounting to Rs. 1,69,62,671/- along with interest and appropriate penalties.

The Department has filed Miscellaneous Application No. 51542 of 2024 dated 11.07.2024 seeking early hearing of the appeal on the following grounds:-

(i) That the Petitioner M/s. ACB India Limited (spectrum) fall under Jurisdiction of erstwhile service tax, Delhi-III Commissionerate which is now an integral part of CGST, Delhi South Commissionerate.

(ii) That the Petitioner namely M/s ACB India Limited (Spectrum) has filed an appeal against OIO No. 09-10-TPS-PC-CGST-DSC-2020-21 dated 01.09.2020.

(iii) That huge arrears is pending for realization.

(iv) That the Department have a strong case and the balance of convenience lies in favour of Department.

2. The brief facts of the case are that the appellant was engaged in the activity of beneficiation of coal whereby the raw coal belonging to its customers who are mostly Electricity Generating Companies is washed to reduce the ash content in raw coal. The washed coal is supplied to the customer and the rejects generated during the process is disposed off by the appellant. The present appeal arises out of the impugned order dated 01.09.2020 whereby Show Cause Notice dated 09.05.2017 pertaining to the period 2013-14 and 2014-15 and Show Cause Notice dated 11.04.2018 pertaining to the period 2015-16 to 2017-18 (up to June 2017) were adjudicated. The first Show Cause Notice dated 09.05.2017 sought to raise demand of Service Tax under three heads namely:

(1) Non-payment of service tax on 'Banking and other financial services" (Corporate Guarantee);

(ii) Non-payment of service tax on External Commercial Borrowings; and

iii) Short reversal of CENVAT Credit attributable to Exempted service.

The second Show Cause Notice dated 11.04.2018 pertaining to subsequent period sought to raise demand only under the head Non-payment of service tax on banking and other financial service (Corporate Guarantee). No demand was sought to be raised under the other two heads as were raised in the first Show Cause Notice dated 09.05.2017. Vide the impugned order, the demand was confirmed along with interest & appropriate penalties. Aggrieved, the appellant has filed the present appeal before this Tribunal.

3. Learned counsel for the appellant submitted that Non-payment of service tax on 'Banking and other financial services' (Corporate Guarantee), was covered in favour of the appellant by a judgment of the Hon'ble Supreme Court which has been followed in two judgments delivered by this Tribunal. She submitted that the appellant had provided Corporate Guarantees to certain banks against credit facilities given by the banks to its Group companies. Admittedly, the appellant did not charge any commission or interest or fee from its Group Companies for providing Corporate Guarantees. She further submitted that the act of providing Corporate Guarantee without any consideration does not fall within the meaning of service as defined under section 65(B)(44) of the Finance Act, 1994. Thus, the same is not eligible to tax. Learned counsel contended that the said issue is covered by the following judgments in favour of the appellant including the judgment in case of appellant itself:

(1) Commissioner of CGST and Central Excise Vs. Edelweiss Financial Services Ltd.²2 2023 SCC Online SC 687

(ii) Principal Commissioner of Central Tax GST, Delhi Vs. Sindhu Trade Linkers³3 2023 SCC Online CESTAT 8277

(iii) M/s ACB India Ltd. Vs. Principal Commissioner of Central Goods and Services Tax, Delhi South⁴4 Service Tax Appeal No. 50202 of 2021 decided on 18.07.2025

3.1 As regards non-payment of service tax on External Commercial Borrowings, learned counsel submitted that the appellant had taken Ex