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2016 (1) TMI 767 - AT - Service TaxClassification of Import of services from M/s. Society for Worldwide Interbank Financial Telecommunication (SWIFT) which is a non-resident entity, not having an office in India - reverse charge - service involved is transfer of information and also includes data processing - Banking and Other Financial Services or not - Held that:- From the detailed process involved, it is clear that the activities appear to amount to provision and transfer of information and data processing in relation to banking and other financial services, as defined under the Act and clearly covered under the entry provided in sub-clause (a)(vii) of Section 65(12) i.e. "provision and transfer of information and data processing". As regards the contention of the appellant that SWIFT does not fall under the category of ‘banking and other financial institution's as SWIFT is not engaged in the business of banking and other financial services, we find that if any person provides the service which is covered under the four corners of definition of "Banking and Other Financial Services", it shall be taxable. As per the plain reading of the definition, apart from ‘banking and other financial institution', the category of a person such as ‘body corporate' and ‘any other person' are also covered. Therefore it is not significant as to what is the nature of the person who is providing the service, but if the service is covered under the definition, such service is liable to service tax, even if it is presumed that SWIFT is not involved in "Banking and Other Financial Services". The service shall remain taxable as the service is clearly covered under the definition of "Banking and Other Financial Services" in clause (vii) of Section 65 (12). Moreover the appellant being liable to pay the service tax is ‘deemed service provider'. Therefore, the status of the appellant is required to be considered and not the status of service provider who is located outside India. For this reason the appellant is undisputedly the deemed banking and other financial institution. - However the demand of the period prior to 18-4-2006 is not sustainable. On the issue of principle of mutuality, we find that the relationship between the SWIFT and the Appellant is not like club or Association and their members. As regards the submission of the appellant that present case is of revenue neutrality as the tax payable on the subject service is cenvatable, we are of the view that the bank is providing various services, some of the services are taxable and some are exempted. Therefore, it cannot be decided that the entire service tax payable on services of SWIFT can be allowed as Cenvat Credit. Merely because Section 80 was invoked, it cannot be said that proviso to Sec 73(1) shall not apply. Both provisions have separate ingredients. In the present case the appellant have not disclosed the data related to service charges paid to SWIFT to the department. Therefore, as there is a suppression of the fact on the part of the appellant, proviso to Section 73(1), gets correctly invoked. Demand conformed invoking the extended period of limitation - Decided partly in favor of assessee.
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