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TMI Blog2021 (9) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... the taxable service that has been fastened upon them was not intended to include 'corporate guarantees' issued by them, that section 126 of the statute governing the transaction, viz., Indian Contract Act, 1872, prescribes the date of issue as reference for enforceability and, thereby, excludes some of the guarantees from inclusion in value of 'taxable service' and that show cause notice is contrary to the judicial precedent resolving the impugned activity as providing of 'business auxiliary service', deserves to be accepted. 2. M/s Infrastructure Leasing & Financial Services Ltd, engaged in providing 'financial services', was found to have failed to discharge liability for the period from 2004-05 to 2009-10 on 'commission' charged for pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishing 'guarantee' in favour of a customer. It was argued that the instrument referred to in the definition of the 'taxable service' is not legally amenable to segregation of 'bank' from 'guarantee' to render the former as redundant for which reliance is placed on '5.......On a true construction of the language of the notifications dated July 31, 1959 and April 30, 1960 it is clear that all that is required for claiming exemption is that the cotton fabrics must be produced on power-looms owned by the co-operative society. There is no further requirement under the two notifications that the cotton fabrics must be produced by the co-operative society on the power-looms "for itself". It is well established that in a taxing statute there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cies which are left there." Learned Counsel for the respondents is possibly right in his submission that the object behind the two notifications is to encourage the actual manufacturers of handloom cloth to switch over to power-looms by constituting themselves into co-operative societies. But the operation of the notification has to be judged not by the object which the rule-making authority had in mind but by the words which it has employed to effectuate the legislative intent. Applying this principle we are of opinion that the case of the appellant is covered by the language of the two notifications dated July 31, 1959 and April 30, 1960 and appellant is entitled to exemption from excise duty for the cotton fabrics produced for the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pore, the parent company has executed corporate bank guarantee in favour of banks in India for facilitation of lending of funds to the appellant and in lieu of the said guarantee the appellant paid 1 per cent of value of guarantee as commission to their parent company at Singapore by way of foreign exchange remittance and their parent company provided them debit notes on quarterly basis. The copies of the said debit notes clearly indicate the transactions with regard to lending facilities in India and therefore through Corporate Guarantee Commission the appellant are chargeable to Service Tax. And the commission paid was taxable under 'Business Auxiliary Service'. Merely because the name of the guarantee has been changed from 'Bank' to 'Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fastened without certainty of the 'taxable service' in application of mind by the authority issuing the show cause notice. Further reliance was placed on '6. It is seen from the records that the appellant had registered themselves under Service Tax Rules, 1994 as provider of sound recording service. However, that by itself is not sufficient to operate as a conclusive ground of taxability. Levy under Finance Act, 1994 is not on the persona but on the activity; neither registration nor wherewithal for rendering the service can substitute for classifying the activity within the definition of the service. Learned Chartered Accountant has placed reliance on the decisions of the Hon'ble Supreme Court in Dunlop India Ltd. and Madras Rubber Fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvertising agency service'; the appellant is not required to choose between alternate classification as that is the responsibility of the tax collector. Fitment within an alternative classification suffices to erase the proposal in the notice but cannot crystallize liability unless the alternative was also proposed in the notice. We are, therefore, not required to test the activity of the appellant for fitment under a different classification.' in the decision of the Tribunal in Radiowani v. Commissioner of Service Tax, Mumbai-I [2019 (21) GSTL 157 (Tri-Mumbai)]. 5. Learned Authorised Representative contends that, on their own admission, the appellant had issued 'bank guarantee' and on which liability had not been discharged. It was also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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