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TMI Blog2023 (8) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 (105) of the Finance Act, 1994. The appellant in the capacity of service recipient was required to discharge service tax liability on such charges deducted by the foreign banks and made taxable under Section 66 A of Finance Act, 1994 read with Rule 2 (1) (d) (iv) of the Service Tax Rules, 2002. 2. Shri R. Subramanya, Learned Counsel appearing on behalf of the appellant at the outset submits that in the entire admitted transaction the appellant has no dealing with the foreign banks. As regard the deduction made by foreign bank while remitting the export proceeds to the Indian Bank, the dealing is between the Indian Bank and the Foreign Bank, therefore, foreign bank is a service provider and the Indian bank is a service recipient who are legally liable to discharge the service tax, therefore, the demand cannot be raised from the appellant. This issue is no longer res-integra as the same has been decided in various judgments including the decision of this Tribunal in the appellant's own case. He placed reliance on the following judgments:- Rajpetro Specialities Pvt Ltd - 2018 (8) TMI 1179-CESTAT Ahmd Cylwin Knit Fashions & Others - 2017 (9) TMI 96- CESTAt Chennai Raymond Limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst schedule of the Central Excise Tariff Act, 1985. During the course of audit, on scrutiny of the General Ledgers of the appellant for 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 hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty payable in terms of this section shall not exceed the service tax payable. (7) I impose penalty of Rs. 2,00,000/- [Rupees Two Lakhs 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e could not be paid by the foreign importer, in that case the foreign bank recovers the charges from banks in India only and in case of import 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with interest and penalties were imposed under Sections 76 and 78. This order of the Asstt. Commissioner was upheld by Commissioner (Appeals) 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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