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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 ..... oked for initiating recovery proceedings. Consequently, there was patent lack of certainty of tax in the mind of the show cause notice issuing authority. The impugned order has failed to set about determining the congruity of that facilitation within the definition of taxable service in section 65(105)(zm) of Finance Act, 1994 - Appeal allowed - decided in favor of appellant. - ST/86820 & 86821/2014 - A/86733-86734/2021 - Dated:- 7-9-2021 - MR C J MATHEW, MEMBER (TECHNICAL) AND MR AJAY SHARMA, MEMBER (JUDICIAL) Shri S S Gupta, Chartered Accountant for the appellant Shri Nitin M Tagade, Joint Commissioner (AR) for the respondent ORDER Outlining the contours of the dispute, Learned Chartered Accountant urged that the grounds on which appeal for setting aside of order-in-original no. 130-131/STC/13-14 dated 18th February 2014 of Commissioner of Service Tax-I, Mumbai has been sought, viz., that 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 enforceabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red 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 no room for any intendment but regard must be had to the clear meaning of the words. The entire matter is governed wholly by the language of the notification. If the tax-payer is within the plain terms of the exemption it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. If such intention can be gathered from the construction of the words of the notification or by necessary implication therefrom, the matter is different but that is not the case here. In this connection we may refer to the observations of Lord Watson in Salomon v. Salomon and Co., 1897 AC 22 at p. 38: Intention of the legislature is a common but very slippery phrase, which, popularly understood may signify anything from intention embodied in positive enactment to speculative opinion as to what the legislature probably would have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le for completing the duties and obligations of debtor to a lender, in case the debtor fails to comply with the terms of the debtor- lender contract. Whereas a bank guarantee is a promise from a bank that the liability of the debtor will be met in the event the debtor fails to favour his contractual obligations. Therefore, the nature of corporate guarantee as well as of bank guarantee is one and the same i.e. for facilitation of the lending facilities. It was noticed that M/s Olam Agro India Ltd, Singapore, 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 n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of Calcutta in Dalhousie Institute v. Assistant Commissioner, Service Tax Cell [2006 (3) STR 311 (Cal.)] as well as the decision of the Tribunal in Commissioner of Central Excise, Bhopal v. Mahakoshal Potteries [2005 (183) ELT 289 (Tri.-Del.)]. This then is a settled law. The tax collector must not only propose the classification as a pre-requisite for demand but also test the fitment of the activity within the definition itself. The discharge of tax liability on a former occasion or a claim entered will not suffice to impose the burden on the assessee for all time to come. Hence mere registration or even the operation of sound recording studio does not, by itself, bring the appellant within the fold of taxation. 7. It is the contention of the appellant that they produced radio spots. Radio spots are mini-programmes that are intended to be broadcast for which the appellant would be engaged by an advertising agency or, at times, by the clients directly. On a perusal of the documents furnished by Learned Chartered Accountant, it would appear that most of the income emanates from the former. In any case, there is no dispute that the appellant produces an entire programme which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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