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TMI Blog2019 (11) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... Adyar has not furnished the Bank Guarantee to the foreign supplier of the petitioner. On the other hand, the Indian Bank approached the intermediary Banks which are admittedly located outside this country, which in turn approached the bank situated in Iraq only for the purpose of furnishing Bank guarantee on behalf of the petitioner to its foreign supplier at Iraq - Therefore, there is no doubt that though the event of furnishing the bank guarantee had taken place in three parts, the chain of events connecting those three parts will undoubtedly lead to an irrebuttable conclusion that all those three events were aimed only to provide the service to the petitioner, namely furnishing of Bank guarantee to its foreign supplier. The petitioner had incurred expenditure in foreign currency towards Bank Guarantee Commission and export proceeds realisation charges paid to the intermediary Banks situated outside India. Certainly, a taxable service has been provided to the petitioner namely, Banking or other financial services. It is the categorical finding of the authorities who passed the impugned orders that taxable service by way of issuing bank guarantee to the petitioner's custome ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermediary foreign Bank, who should have relationship either with the customer or with any of the Iraqi banks to have the bank guarantees issued. Accordingly, Indian Bank, Adyar Branch, engaged the services of two foreign banks, namely JP Morgan Bank, Singapore and Credit Agricole Bank,Paris, to issue the Bank Guarantees in this transaction. Those two banks, since do not have any direct relationship with the end customer, engaged the services of a local corresponding Bank in Iraq, namely, Trade Bank of Iraq, Bagdad, Iraq, who is also the banker to the customer of the petitioner in Iraq. On the request of the Indian Bank, in the form of a Counter Guarantee, the Intermediary Bank issued the Counter Guarantee to the Corresponding Bank, namely Trade Bank of Iraq and the actual Bank Guarantee was issued to the customer by Trade Bank of Iraq which is accepted by the customer. In this transaction, Indian Bank debited the Account of the Petitioner for charges for the services of providing Counter Bank Guarantee. Indian Bank charged Service Tax on the petitioner for the services rendered and the Service Tax so charged and collected from the petitioner was paid by the Indian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest and penalty. The petitioner relied on Trade Notice dated 10.02.2014 issued by the Commissioner of Service Tax-I, Mumbai, wherein it was clarified that Service Tax would not be applicable for commission/ charges paid to intermediary/ foreign Banks for providing the services in question. The petitioner also relied on the order passed by the Commissioner (Appeals), dated 04.08.2016 in the case of GEA- BGR Energy Systems India Limited. However, the respondent failed to appreciate the submissions and erroneously passed the impugned order. The respondent thus, failed to follow the order of Commissioner (Appeals) dated 04.08.2018 under similar circumstances as well as the ratio laid down in Trade Notice dated 10.02.2014. Hence, the present writ petition. 3. W.P.No.199/2019 is filed against the order of the respondent dated 17.09.2018 made in Order in Appeal No.489-492/2018 (CTA-I). 4. The case of the petitioner in this writ petition is also similar to the one as stated in W.P.No.32675/2018. The only difference is that the present challenge is against the order passed by the Appellate Authority confirming the order of the Adjudicating Authority made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel appearing for the respondents on both the cases submitted as follows: The trade notice relied on by the petitioner issued by the Mumbai Commissionerate was issued based on the stay order passed by the Mumbai Tribunal and that the Appeal before the Tribunal is still pending. The impugned orders challenged in these writ petitions are issued by the quasi judicial authorities, one by the Adjudicating Authority and the other by the Appellate Authority. Therefore, such authorities, exercising the quasi jurisdiction function, even otherwise, are not bound by the trade notices or circulars, as they have to apply their independent mind and decide the matter. 9. In support of the above contentions, the learned counsel for the Revenue relied on the following decisions. (i) 2012 (228) ELT 581 (SC) (Commissioner of Central Excise, Bhopal, v. Minwool Rock Fibres Ltd.) (ii) 1995 (77) ELT 479 (SC) (Kirloskar Oil Engines Ltd. v. Union of India) (iii) 2014 (306) ELT 69 (Mad.) (Commissioner of Customs, Chennai-I v. Avenue Impex) (iv) 1994(70) ELT 190 (Mad.) (Sundaram clayton Ltd. v. Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner heavily relied on the trade notice issued by the Commissioner of Service Tax-I, Mumbai dated 10.02.2014, wherein the said authority clarified that in cases where the foreign banks are recovering certain charges for process of import/export documents regarding the remittance of foreign currency, the banks in India would be treated as recipient of service and therefore, required to pay Service Tax. Thus, by placing much reliance on the above said Trade Notice, the petitioner seeks to challenge the impugned orders. 14. According to the petitioner, the said Trade Notice issued by Mumbai Commisionerate is binding on all the Commissionerate situated throughout the country. In support of the above contention, the learned counsel relied on the decision of the Apex Court reported in 2011(273) ELT 321 (SC) (Union of India v. NITDIP Textile Processors Pvt.Ltd.) wherein it is held that the trade notice, even if it is issued by the Revenue Department of any one State is binding on all other Departments with equal force all over the country. However, it is seen that in a later decision reported in 2012 (228) ELT 581 (SC) (Commissioner of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essors case , the Hon'ble Apex Court has also observed that the trade notice as such, is not binding on the Courts. Since this Court is inclined to decide the issue involved in this case on merits, it is to be stated that the Trade Notice relied on by the petitioner is not binding on this Court as well for deciding the matter on merits. At this juncture, it is to be noted that this Court has to decide the merits of the matter, since in W.P.No.199/2019, the challenge made is against the order of the Appellate Authority, confirming the order of the original authority. Therefore, it is evident that the appellate remedy already availed by the petitioner in respect of one set of period has also resulted in passing an order against the petitioner thereby confirming the view of the order of the Adjudicating Authority. 17. With this background, let me consider as to whether the petitioner or their Banker namely Indian Bank, Adyar, is liable to pay the same in respect of the service rendered by intermediary Bank as well as the Banker at Iraq which furnished the Bank Guarantee to the supplier of the petitioner. 18. In this case, there is no dispute to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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