TMI Blog2016 (1) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax, LTU, Mumbai. 2. The fact of the case is that the assessee Union Bank of India (UBI) received certain services from M/s Society for Worldwide Interbank Financial Telecommunication (SWIFT) which is a non-resident entity, not having an office in India; that UBI was utilizing the services of SWIFT network essentially to transmit, financial messages internationally which culminated in foreign exchange remittance transactions getting completed, between UBI and the intended recipient of the said foreign exchange, like banks, customers etc; that UBI was paying commercial considerations to SWIFT for hiring the said services periodically. A show cause notice was issued wherein it was contended that the said services rendered by SWIFT to UBI appeared to amount to a taxable service classifiable under the category of Banking and Other Financial Services under sub clause (vii) of Section 65 (12) provision and transfer of information and data processing are liable to service tax from 16-7-2011. In the show cause notice, it was also contended that as per Rule 2(1)(d)(iv) of Service Tax Rules, 1994, as it existed w.e.f. 16-8-2002 and the subsequent introduction of Section 66 A of the F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... January 2010 to September 2010 Set aside the impugned order by dropping the demand. To set aside the order of the Commissioner (Appeals) 3. Shri Roopam Kapoor, Ld. Commissioner (A.R.) appearing on behalf of the Revenue reiterates findings of the impugned order inasmuch as Service Tax demand was confirmed. As regard the appeal of the department he explained/reiterated grounds of appeals. 4. On the other hand, Shri. Bhavin S. Mehta, C.A. appearing on the behalf of the assessee made detailed submission on merit of the case and also submitted synopsis dated 8/7/2015. 5. We have carefully considered the submissions made by both the sides. 6. We find that the very same issue has been decided by this Tribunal in the case of Bank of Baroda vs. Commissioner of Service Tax, Mumbai vide Final Order No. A/85010/16/STB dated 5/1/2016 and the relevant findings of the Tribunal is as under: 5. We have carefully considered the submissions made by both the sides. The demand of service tax was confirmed on the appellant under the category of Banking and Other Financial Services. Definition of the same is reproduced below: Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary SWIFT customer. Thus the message data is processed at both locations to prevent data loss. This clearly shows that the data is processed in the entire process of transferring of messages through SWIFT operating centre. 7.1 On further perusal of record, we observe that the SCN contended that services provided by SWIFT relate to transmission and exchange of financial messages through SWIFT NETWORK between two users, with SWIFT acting as the carrier of such messages on a day to day basis. As per the information available on the SWIFT website, SWIFT provides the proprietary communications platform, products and services that allow their customers to connect and exchange financial information securely and reliably; SWIFT is solely a carrier of messages. It does not hold funds nor does it manage accounts on behalf of customers, nor does it store financial information on an on-going basis. As a data carrier, SWIFT transports messages between two financial institutions. This activity involves the secure exchange of proprietary data while ensuring its confidentiality and integrity. As per the history of SWIFT available in the said website, SWIFT started the mission of creating a shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he terms data , computer network , information are defined under various provisions of the ACT read with the relevant definitions provided under the Information Technology Act, 2000. From the discussions above, it appeared that to facilitate transmission of financial messages, computer network systems known as SWIFT network are installed at BOB and at the receiver's end i.e. between all intended sender's and recipient's end and SWIFT network based at Belgium, which acts as the transporter/carrier of messages, receives, processes and transmits data between such intended users. Therefore, it appears that the entire activity of messaging of financial transactions with the intention to transfer funds, confirm receipt of such messages etc. is done exclusively with the objective to retrieve the information contained in the said financial message, process the same and then transfer the processed information to the respective customers, i.e. presenting and recipient banks, financial institutions etc., as the case maybe. After the processing is complete in all respects, such processed data leads to settlement of funds between BOB and the recipient banks. It further appeared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18-4-2006 is not sustainable. Hence, the same is set aside. 7.5 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. In the judgments cited by the Ld. Counsel it was held that the subscription charges are not taxable whereas in the present case the appellant is paying service charges on the actual quantum of services received by them from SWIFT. Even in the case of club or association, if the members are paying for a specific service, the said payment in not exempted from service tax. What is not taxable is only the subscription charges paid by the members of association. Moreover in the present case, SWIFT is acting as a business organization and charging their service charges from the bank on the basis of actual quantum of service provided to the banks. The banks are not paying some subscription to the SWIFT but they are paying towards the actual quantum of services received by them from SWIFT. In view of this fact, it is clear that the transaction between the Bank and the SWIFT is purely a business transaction; therefore the principle of mutuality does not exist in such tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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