Foreign bank charges not taxable under Banking Services for 2011-12. Appeal allowed with benefits.

The Tribunal held that the amount deducted by the foreign bank towards bank charges was not taxable under "Banking and Other Financial Services" for the period 2011-12. The appeal was allowed in favor of the appellant, with consequential benefits as per law.

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Issues involved: Determination of taxability of amount deducted by foreign bank towards bank charges under "Banking and Other Financial Service" for the period 2011-12.

Summary:

Issue 1: Taxability of amount deducted by foreign bank towards bank charges
The appellant, a manufacturer of various powdered products, exported goods and received lesser export proceeds due to deductions by foreign banks for bank charges. The Service Tax authorities issued a Show Cause Notice demanding Service Tax, interest, and penalties. The appellant contended that the issue was settled in their favor in a previous case. The Tribunal, after considering previous decisions, found that the foreign bank charges were not taxable under "Banking and Other Financial Services" as the services were rendered to the Indian bank, not directly to the appellant. Relying on earlier judgments, the Tribunal allowed the appellant's claim and set aside the impugned order.

Conclusion:
The Tribunal held that the amount deducted by the foreign bank towards bank charges was not taxable under "Banking and Other Financial Services" for the period 2011-12. The appeal was allowed in favor of the appellant, with consequential benefits as per law.

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