Trade notices do not bind quasi-judicial authorities, and service tax applies to bank guarantee commission received by the beneficiary.

Departmental trade notices and circulars bind officers within the department as administrative instructions, but they do not bind quasi-judicial adjudicating or appellate authorities, which must decide according to law. On service tax, charges and commission relating to bank guarantees arranged through foreign intermediary banks were treated as taxable because the service was received in India by the petitioner, the expenditure was borne by the petitioner, and the petitioner was the beneficiary of the arrangement. The article states that the tax demands were sustained on that basis.

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Issues: (i) Whether the trade notice issued by another Commissionerate was binding on the adjudicating and appellate authorities. (ii) Whether the petitioner was liable to pay service tax on the charges and commission relating to bank guarantees arranged through foreign intermediary banks.

Issue (i): Whether the trade notice issued by another Commissionerate was binding on the adjudicating and appellate authorities.

Analysis: Departmental circulars and trade notices are administrative instructions binding on assessing officers within the department, but they do not bind quasi-judicial authorities or courts. A trade notice issued by one Commissionerate cannot compel an adjudicating authority or appellate authority to decide contrary to law, and the petitioner could not claim an enforceable right merely from such notice.

Conclusion: The trade notice was not binding on the quasi-judicial authorities, and the petitioner could not succeed on that basis.

Issue (ii): Whether the petitioner was liable to pay service tax on the charges and commission relating to bank guarantees arranged through foreign intermediary banks.

Analysis: The banking arrangement was a composite chain undertaken for the benefit of the petitioner to secure bank guarantees for its foreign customer. The expenditure for the foreign intermediary services was borne by the petitioner, and the service was held to be received by the petitioner in India. The Court also accepted the finding that the place of provision and the recipient of the service were connected with the petitioner, making the tax liability sustainable.

Conclusion: The petitioner was liable to pay service tax on the bank guarantee commission and related charges.

Final Conclusion: The challenge to the service tax demands failed, and the demands confirmed by the authorities were sustained.

Ratio Decidendi: Trade notices and departmental circulars do not bind quasi-judicial authorities, and service tax liability attaches to the person found to be the recipient of the service and the beneficiary of the transaction.

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