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TMI Blog2023 (7) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... CE 3) 2015 (38) STR 605 (Tri- Delhi) - Greenply Industries Ltd VS CCE 4) Circular No. 20/2013-14-ST-I (Commr.of ST-I, Mumbai T.N.) dated 10-02-2014 5) Final Order No. A/85816/2018 dated 23-3-2018 in Appeal No. ST/88384/2014 of Hon'ble CESTAT, Mumbai 6) 2017 (10) TMI 1231 - CESTAT New Delhi - Dileep Industries Pvt Ltd vs CCE 7) Final Order No. A/12243/2022 dated 22-12-2022 in Appeal No. ST/474/2012 (Dishman Pharmaceuticals & Chemicals Ltd) passed by Hon'ble CESTAT Ahmedabad 3. Shri. Tara Prakash, Learned Deputy Commissioner(AR), appearing on behalf of the revenue and reiterates findings of the impugned order. 4. On careful consideration of the submission made by both the sides and perusal of the records, we find that the revenue proposed demand of Service Tax on the banking charges, which was charged by Foreign Bank to the Indian Bank and the Indian Bank has recovered the same from the appellant as reimbursement. 4.1 In this fact, it is clear that if at all there is a service provider and Service recipient relationship, it is between the Foreign Bank and Indian Bank. Accordingly in India the actual service recipient is Indian Bank for liable to pay the Service T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year 2010-11, it was noticed that the appellant have made payment of Rs. 3,16,46,565/- under the head of Foreign Banks Charges to the Foreign Banks towards interest, Foreign Bank Commission / Charges, Foreign Bank Charges for LC-retired and other charges. It was also observed that the appellant has exported their goods and Foreign Bank collected report proceeds and after deducting their commission, they made payment to the appellant. The appellant has booked expenditure of such commission in their books of account under the head of Foreign Bank Charges. Thereafter, the appellant has provided the details of Foreign Bank Charges paid by them to the Foreign Banks for the period from April 2008 to March 2013. On the basis of the information and further clarification by the appellant, a SCN was issued wherein the demand of service tax amounting to Rs. 2,24,86,235/- was proposed during period 2008-08 to 2012-13. The adjudicating authority after consideration of submission made in their written reply, additional submission and during personal hearing adjudicated the SCN, wherein the following order was passed: (1) I confirm the demand of the Service Tax amounting to Rs. 2,222,99,27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only] on Shri chandrashekhar Chincolikar, Assistant Manager (Commercial) & Authorised Signatory of M/s Raj Petro Specialties Pvt. Ltd Survey No. 146/2/3, Madhuban Dam Road, Village-karad, Silvassa, under Section 77 of Finance Act, 1994. For the purpose of confirmation of above demand the adjudicating authority invoked Section 66A of Finance Act, 1994 and Rule 3(2) of the Taxation of Service (Provided form out-side India and received in India) Rules, 2006 under Reverse Charge Mechanism. Being aggrieved by the Order in Original, the appellant filed present appeal. 2. Sh. Vinay S. Sejpal Ld. Counsel appearing on behalf of the appellant at the outset submits that the appellant had no contract for dealing with the Foreign Banks directly. All the service charge were paid by the Indian Banks to the Foreign Banks for which there was arrangement between both the banks where the appellant is not the party, therefore the appellant is not service recipient from the Foreign Banks. Therefore, the payments on such charges were also not made by the appellant to Foreign Banks. In this position the Indian Banks are the service recipient of the service provided by Foreign Banks therefore, the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt transactions, if the foreign exporter does not bear the foreign bank charges, the same are recovered by the foreign bank from the bank in India. The combined reading of the relevant articles in the said two internationally accepted conventions, undoubtedly show that services are provided by the foreign bank to the bank in India. Therefore, as per the Service Tax law, as a recipient of service, the bank in India, is required to pay Service Tax under erstwhile Section 66A of the Finance Act prior to 1-7-2012 and under the provisions of Notification No. 30/2012-S.T., dated 20th June, 2012 after 1-7-2012. 5. The views of the banks that services provided by the foreign bank are received by the importer or exporter in India is not factually and legally correct because, for a person to be treated as recipient of service, it is necessary that he should know who the service provider is and there should be an agreement to provide service, which may be oral or written. In the present case, the importer and exporter does not even know who the service provider is, as they are not aware of the identity of the foreign banks which would be providing services. Exporter or importer in India doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals) vide order-in-appeal dated 17-4-2008 against which this appeal has been filed. 2. Heard both sides. 3. Shri R.S. Sharma, learned Counsel for the appellant pleaded that similar demand has been confirmed against the appellant for the previous period by the original adjudicating authority which had been set aside by the Commissioner (Appeals) vide Order-in-Appeal No. 114/DK/S.T./JPR-I/2008, dated 12-11-2008, that in any case since the appellants have neither received any service from the foreign bank nor has directly paid any amount to the foreign bank, they cannot be treated as service recipient and no Service Tax can be charged from them under reverse charge mechanism and that it is ING Vyasa Bank which has received the services, from the foreign bank for which the Service Tax cannot be demanded from the appellant. He, therefore, pleaded that impugned order is not correct. 4. Shri R. Puri, learned DR defended the impugned order by reiterating the finding of the Commissioner (Appeals). 5. We have considered the submissions from both sides and perused the records. We find that no documents have been produced showing that foreign bank has charged any amount from the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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