Service tax liability on foreign bank charges and finance costs...

Service tax liability on foreign bank charges and finance costs paid in foreign currency. It discusses the absence of a service provider-recipient relationship between the foreign bank and the appellant, as the foreign bank provided services to the buyer who had a letter of credit facility. The appellant received services, if any, from its bank in India where the documents were negotiated. Since the service provider (foreign bank) and recipient (buyer) were both located outside India, there is no question of taxing such service in India as it was provided outside the taxable territory. Previous rulings and circulars support that no service tax is leviable when the place of provision is outside India. If the appellant is required to pay service tax under the reverse charge mechanism, it would be entitled to avail CENVAT credit. The extended period of limitation was wrongly invoked as there was no suppression of facts by the appellant, who had clearly reflected such payments in its financial statements. Relevant case laws were cited regarding the interpretation of "suppression" and the non-imposition of penalties for interpretation of law.