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2023 (12) TMI 1008 - AT - Service TaxLevy of service tax - business auxiliary service or not - overseas Banks has deducted certain Bank charges from the export realization of the appellant’s export of goods while remitting the export proceeds to the Indian Bank of the appellant - applicability of reverse charge mechanism - HELD THAT:- In the present case undisputed fact is that the bank charges deducted by the Foreign Bank while remitting the export proceed received from the Foreign Country to the exporters Indian Bank was demanded Service Tax - it is found that there is no contract or understanding between appellant and the Foreign Bank. The appellant being exporter of goods is exclusively dealing with Indian Bank i.e HDFC Bank of the appellant. In such case if any charge is collected by the Indian Bank from the appellant the said activity would be liable to Service Tax that too in the hands of the Bank. In the present case the dealing is clearly between the Foreign Bank and Indian Bank, therefore in such case the appellant is not a service recipient of the Bank charges collected by the Foreign Bank from the payment remitted to the Indian Bank. The Indian Bank has only collected such charges from the appellant as a reimbursement which was born by the Indian Bank while transacting with the Foreign Bank. Therefore, the appellant even though bearing the charges as a reimbursement the same cannot be said to be service charges - in the present case the demand of Service Tax was raised under the head of BAS which is absolutely incorrect. Therefore, on this count also the demand of Service Tax will not sustain. The impugned order set aside - appeal allowed.
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