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TMI Blog2023 (6) TMI 1197X X X X Extracts X X X X X X X X Extracts X X X X ..... lso charges certain consideration in the form of guarantee commission from Jindal, Indonesia for extending corporate guarantee. During the course of audit it was notice that the respondent has received the guarantee commission shown in their balance sheet during the period 2005-2006 to 2007-2008 and as per the Department the respondent is liable to service tax on the guarantee commission under the head business auxiliary services. Subsequently a show cause notice dated 27.09.2010 was issued to the respondent demanding service tax on guarantee commission under the category of banking and other financial services under Section 65(105)(zm) of the Finance Act, 1994. The respondent filed detailed reply to the show cause notice. After following the due process the Commissioner passed the impugned order by dropping the demand. Aggrieved by the said order, department has filed the present appeal and the respondent has filed the cross objections in the appeal filed by the Department. 3. Heard both the parties and perused the records. 4. Ld. DR submitted that the impugned order passed by the Ld. Commissioner is not sustainable in law as the same has been passed without properly appreciatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sub-category under Section 65(12) of the Act under which the alleged services are taxable and in the absence of the same, the liability to pay tax cannot be fastened on the respondent. For this submission she is relied upon the following decisions:- - Micromatic Grinding Technologies Limited Vs. Commissioner of C.Ex. & S.T. Ghaziabad, 2019 (8) TMI 320 - CESTAT, Allahabad. - Commissioner of C.Ex. Vs. Brindavan Beverages (P) Ltd. 2007 (6) TMI 4 - Supreme Court. - Commissioner of Cus. & C.Ex., Goa Vs. Swapnil Ashnodkar, 2018 (10) GSTL 479 ( Tri. - Mum.) 6. She further submitted that the respondent is not a body corporate engaged in providing the banking services. She also submitted that section 65 (12) (a) of the Act clearly provides that the services under BOFS shall mean services specified under Sub-clause (a) provided by: a. Banking Company; or b. A financial institution including a non-banking financial company; or c. any other body corporate or commercial concern. She also submitted that the respondent is not a body corporate engaged in providing the banking service tax and therefore they are not liable to discharge the services under the BOFS, for this she also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of both the parties and perusal of the material on record we find that the only issue involved in the present case is whether the corporate guarantee commission received by the respondent for providing corporate guarantees for their subsidiary company PT Jindal Stainless Indonesia (Jindal Indonesia) would be exigible to service tax under the category of BOFS for the purpose of Finance Act, 1994. In order to appreciate the whole issue it would be useful to reproduce the definition of BOFS as appearing in Section 65(12) of the Finance Act, 1994. "9.1 For better understanding of the issue, it would be useful to reproduce the definition of BOFS as appearing Section 65(12) of the Finance Act, 1994. "Banking and Other Financial Services" means- (a) the following services provided by a banking company or a financial institution including a non-banking financial company or any other body corporate or [commercial concem) namely*, (1) financial leasing services including equipment leasing and hire-purchase: Explanation-For the purposes of this item, financial leasing" means a lease transaction where- (i) contract for lease is entered into between parties for leasing of a specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the word "other body corporate came about with effect from 10.9.2004, Itself i.e. right from inception ii. The definition of BOFS under section 55(12) is a comprehensive definition and not an inclusive definition iii. in Section 65(12)(a), the only persons who have been made liable to service tax under this category are banking company, financial institution (including a non-banking financial company) any other body definition corporate or a commercial concern. iv. Further, after listing out the category of persons who would be exigible to tax under the category, the services provided by such persons which alone would be exigible to such taxes have been comprehensively and specifically listed out with the use of the words "namely" 10. Further, we find that the respondent does not fit in the definition of body corporate because they are not engaged in providing banking services and this issue has been clarified by the board circular dated 04.07.2006 wherein it has been clarified that the word 'any other person" in Section 65(105)(zm) has to be read with principle of ejusdem generis with the preceding words. Further, we find that in the case of Banswara Syntec cited (Supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tee is actually an in-house guarantee and is not issued to customers generally". 11. The findings of the Tribunal is recorded in para 7 which is reproduced herein below:- "Viewed in this light, we are of the considered opinion that the activity of issue of corporate guarantees by the appellant from their associate/subsidiary companies in India and also the procurement/receipt of corporate guarantee from their parent/associate company abroad will not come within the fold of section 65(12)(a) ibid and in particular sub-clause (ix) of that provision. The appellant succeeds on merit". 12. In view of these facts, we are of the view that since the services in question has been rendered outside India, the same is not taxable as they qualify as export of services in terms of rule 3 of export of service Rules, 2004. As far as invoking the extended period of limitation is concerned, we are of the view that the whole issue relates to interpretation of the law because the Department was not certain of the taxability of the impugned services and the definition of banking and financial service was changed from time to time. Hence the extended period cannot be invoked and by that entire deman ..... X X X X Extracts X X X X X X X X Extracts X X X X
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