TMI Blog2018 (8) TMI 1179X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is not directly making the payment to the Foreign Banker towards any service provided by the said Foreign Banker to the Indian Bank, the assessee is not liable to pay service tax. Any bank charges paid by Indian Bank to the Foreign Banks even though in connection with import and export of the goods and the same was debited to the appellant, the service tax liability does not lie on the appellant. Matter remanded to adjudicating authority to verify the quantification and if any service tax liability arises, the same may be demanded from the appellant - appeal allowed by way of remand. - Appeal No.ST/11055/2015-DB - Final Order No. A / 11768 /2018 - Dated:- 17-8-2018 - HON BLE MR. RAMESH NAIR, MEMBER ( JUDICIAL ) And HON BLE MR. RAJU, MEMBER ( TECHNICAL ) For Appellant : Shri Vinay S. Sejpal ( advocate ) For Respondent : Shri J. Nagori ( AR ) ORDER Per : Ramesh Nair The appellant are engaged in the manufacture of excisable goods namely, different type of Industrial Oil, Lubricating Oil and Petroleum Jelly falling under chapter 27 to the first schedule of the Central Excise Tariff Act, 1985. During the course of audit, on scrutiny of the Genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 78 of Finance Act, 1994. However, if the above amounts of service tax are along with interest within 30 days of receipt of this order, the said penalty imposed shall be treated as 25% penalty should also be paid amount of service tax provided that the amount of said 25% penalty should also be paid within 30 days of receipt of the order intems of proviso to Section 78 of Funance Act, 1994. (5) I impose penalty of ₹ 5,000/- [Five Thousand Only] on M/s Raj Petro Specialties Pvt. Ltd Survey No. 146/2/3/ Madhuban Dam Road , Village-Karad, Silvassa under Section 77 of the Finance Act, 1994. (6) I impose penalty of ₹ 200/- per day for every day during which ffailure in payment of service tax continued or at the rate of 2% of such ta, per month, whichever is higher, strating with the first day after the due date till the date of actual payment of the outstanding amount of service tax on M/s Raj Petro Specialties Pvt. Ltd. Survey No. 146/2/3, Madhuban Dam Road, Village-Karad, Silvassa under Section 76 of Finance Act, 1944 for the period from 01.04.2008 to 09.05.2008 provided that the total amount of the penalty payable in terms of this section shall not exceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow: 4. In order to understand the obligations of the foreign banks, the banks in India and importer/exporter, the said URC 522/UCP 600 were examined. Article Nos. 4, 8, 10, 11, 16, 21, 26 of URC 522 and Article Nos. 3, 4, 7, 8, 9, 13, 37 of UCP 600, read with other relevant Articles in these two brochures are relevant for the present issue. A combined reading of these Articles shows that there is an implied contract between a bank in India and a foreign bank, whereby, the foreign bank recognizes only the Bank in India for providing their services and for collection of their charges. In case of any clarification on any issue regarding their activity, there is always correspondence between the foreign bank and the bank in India. Even the amount of charges collected by foreign bank is informed only to the bank in India. The exporter or the importer in India comes to know about these charges through their own bank in India. In fact the most interesting aspect is that the importer or the exporter in India is not even aware of the quantum of charges which are charged by the foreign bank. Further, in case of export transactions, if the remittance could not be paid by the foreign impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s abundantly clear that when the Indian Banks are collecting charges including the charges of Foreign Banks toward import and export of the goods of their client. In such case, as regard the service tax liability under Reverse Charge Mechanism, the Indian Banks are recipient of service, therefore, the appellant cannot be held as recipient of service provided by Foreign Banks to the Indian Banks. Accordingly, the appellant is not liable to pay service tax under Reverse Charge Mechanism. This very same issue has been considered by this Tribunal in the case of Greenply Industries Ltd (Supra), wherein Division Bench of this Tribunal passed following order: The appellants are exporters. They receive the export proceeds through ING Vyasa Bank. The foreign bank through which the payment had given channelised charged some amount from the appellant s bank ING Vyasa Bank which in turn recovered the same from the appellant. The department demanded Service Tax on the amount which the foreign bank charged from ING Vyasa Banker which, in turn, was recovered from the appellant. On this basis, Service Tax demand of ₹ 96,392/- was confirmed against the appellant along with interest and p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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