TMI Blog2020 (2) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... finition of export of service. Service charges paid to Foreign Banks against the service received by the appellant-bank - Service charges paid to Master Card International - HELD THAT:- The said services fall in the definition of Import of Service and the same was made liable to service tax on reverse charge basis with effect from 18.4.2006 in view of the decision of the Bombay High Court in the case of Indian National Ship Owners Association [2008 (12) TMI 41 - BOMBAY HIGH COURT]. Therefore, up to 18.4.2006, appellants are not liable to pay service tax on reverse charge basis. Extended period of limitation - HELD THAT:- Commissioner himself has admitted that short-payment of service tax is not deliberate but owing to the reason of system failure. Further, the Commissioner has dropped the penalty under Section 78 by resorting to Section 80 of the Finance Act. Once the penalty under Section 78 is dropped, it means that the Original Authority did not find that there was an intention to evade payment of service tax on the part of the appellant. The essential condition for invoking the extended period of limitation is that there should be an intention to evade payment of servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Learned counsel for the appellant submitted that in the present appeal, following issues are involved, which are shown in the table below: Sl. No. Issue involved Period Involved Amount of Service Tax 1 Commission received by appellant from Money Exchange Houses abroad 10.9.2004 to 31.7.2007 ₹ 35,46,188 2 Service charges paid to Foreign Banks against the service received by the appellant-bank 10.9.2004 to 31.7.2007 ₹ 17,46,216 3 Service charges paid to Master Card International 10.9.2004 to 31.7.2007 ₹ 10,43,822 4.1 As far as issue No.1 is concerned, the learned counsel submitted that the appellant received the consideration from the Exchange Houses abroad for services provided by the appellant. The case of the appellant is that the transaction i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tructions from the foreign exchange house is honoured by the appellant by debiting the Vostro account of the foreign exchange house and crediting the beneficiary account, either with the appellant or with any other bank in India. Subsequently, at the end of each month, the appellant works out the eligible exchange house commission and the same is accounted by debiting the Vostro account of the foreign exchange house and crediting the other income account of the appellant. Learned counsel submitted that now it is settled law that when a payment is received in Indian rupee through a foreign bank, the same needs to be treated as received in convertible foreign exchange. He further submitted that this issue is also settled by the Tribunal in various decisions cited below: Support.com India Pvt. Ltd. vs. Commissioner of ST: 2018 (9) GSTL 260 (Tri.-Bang.) Mitsubishi Heavy Industries India Pvt. Ltd. vs. Commissioner of Central Excise: 2017 (5) GSTL 321 (Tri.-Del.) Sun-Area Real Estate Pvt. Ltd. vs. Commissioner of Service Tax: 2015 (39) STR 897 (Tri.-Mumbai) 4.3 Learned counsel also submitted that the observations of the Commissioner in parag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 78 of the Finance Act, 1994. He further submitted that in a way the Commissioner has accepted that there was no intention to evade payment of service tax by the appellant which is a condition precedent for invocation of larger period of limitation. He further submitted that in the present case, the show-cause notice was issued on 3.9.2008 for the period from 1.9.2004 to 31.7.2007 and therefore, the period up to 31.3.2007 is barred by limitation in view of the following decisions: Commissioner of Central Excise, Jaipur-I vs. Rajasthan Renewable Energy Corpn. Ltd.: 2018 (15) GSTL 661 (Raj.) Rochem Separation Systems (India) P. Ltd. vs. Commissioner of Service Tax, Mumbai: 2015 (39) STR 112 (Tri.-Mumbai) Commissioner of Service Tax, Mumbai-IV vs. Rochem Separation Systems (I) P. Ltd.: 2019 (23) GSTL 446 (Bom.) 7. He also submitted that once the Commissioner has dropped the penalty under Section 78 by invoking the provisions of Section 80 of the Finance Act, clearly shows that there is no intention to evade payment of service tax and hence, the penalties under Section 76 and 77 and invocation of extended period is not sustainable in la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of identity, for this exercise, the KSFE does not charge any amount as commission or fee from the recipients of the amount. The charge if any levied by the company outside India on the person who pays the amounts is not a transaction in India. Therefore, the CESTAT was justified abundantly in following the ratio of Muthoot FinCorp and deciding that KSFE, which was in appeal before the CESTAT, was entitled to an order as has been granted by the Tribunal. The CESTAT had rightly set aside the order of the Commissioner of Service Tax. 3. In the result, we see no merit in this appeal and hence, the same is dismissed. Therefore, by following the ratio of the above said decisions, we are of the considered opinion that the appellants are not liable to pay service tax as the service rendered by the appellant fall in the definition of export of service. 9.1 As far as issue No.2 and 3, namely, service charges paid to foreign banks against the service received by the appellant-bank and service charges paid to Master Card International are concerned, we find that the said services fall in the definition of Import of Service and the same was made liable to serv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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