TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 1130
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.... contract performance, the petitioner has to issue Advance Bank Guarantee as well as Performance Bank Guarantee. Both the guarantees are to be issued from an Iraqi Bank in favour of the customer. The petitioner's banker, namely Indian Bank, Adyar, Chennai, does not have any direct relationship with any of the Iraqi Banks to issue the Guarantee and therefore, there was no possibility for the customer in Iraq accepting the Bank Guarantee issued by Indian Bank, Adyar. Therefore, the Indian Bank would have to necessarily identify the intermediary 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 Gua....
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....iginal Nos.48-51/2018 (ADC) dated 27.03.2018 confirming the demand of Service Tax, interest and penalty. The petitioner filed Appeal against the Order in Original before the Commissioner (Appeal) who confirmed the demand. Thereafter, the statement of demand dated 13.04.2018 for the period from April 2015 to March 2017 was issued demanding Service Tax of Rs. 77,72,633/-. The matter was adjudicated by the respondent who passed the impugned order dated 31.08.2018, confirming the demand of Service Tax, interest 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 d....
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....inding on the other Commissionerate. As per the above said trade notice, only the Bank is liable to pay the service tax and not the petitioner. In support of his contention that the trade notice issued by one Commissionerate is binding on the other Commissionerate, learned counsel relied on 2011(273) ELT 321 (SC) (Union of India v. NITDIP Textile Processors Pvt.Ltd.) 8. Per contra, the learned 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 58....
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....e of those foreign banks and thus, only such Banker has to pay the service tax and not the petitioner. 13. In support of the above contention, the learned counsel for the petitioner 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 ....
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....his juncture in the very same decision made in NITDIP Textile Processors 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 thi....