AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (1) TMI 767
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....id on 1-11-2008 is appropriated against this confirmed demand. 5.3 BOB are liable to pay appropriate interest at the applicable rates under Section 75 of the Act for delayed payment of the Service Tax. 5.4 No penalty is imposed in this case in view of reasons stated above invoking the provisions of section 80 of the Act." 2. The fact of the case is that the appellant Bank of Baroda (BOB) received certain services from M/s. Society for Worldwide Interbank Financial Telecommunication (SWIFT) which is a non-resident entity, not having an office in India; that BOB was utilizing the services of SWIFT network essentially to transmit, financial messages internationally which culminated in foreign exchange remittance transactions getting completed, between BOB and the intended recipient of the said foreign exchange, like banks, customers etc; that BOB was paying commercial considerations to SWIFT for hiring the said services periodically. A show cause notice was issued wherein it was contended that the said services rendered by SWIFT to BOB appeared to amount to a taxable service classifiable under the category of "Banking and Other Financial Services" under sub clause (vii) of Sect....
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....the services of appellant being covered under telecommunication services not liable to service tax. He further submits that as per definition of 'Banking and Other Financial Services', the service shall be rendered by Banking Company or Financial Institution including non-banking financial company or other body corporate or any other person. He refers to Circular No. 83/1/2006-ST dtd 4-7-2006 clarifying that meaning of 'body corporate' and 'any other person' shall be read ejusdem generis with preceding words. Therefore, any other service provider, similar to banking or financial institution are only liable for payment of service tax. M/s SWIFT is not engaged in business similar to banking and other financial institution. SWIFT is basically providing telecommunication service of transfer of messages. Accordingly no tax is payable under reverse charge. He further submits that the service provider is located in Belgium which is outside India and tax has been demanded for the period 1-1-2005 to September 2008. In view of the judgment of Indian Ship Owners Association - 2009 (13) STR 235 (Bom.), which was upheld by the Hon'ble Supreme Court - 2011-TIOL-05-SC-ST, tax unde....
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....dered the submissions made by both the sides. The demand of service tax was confirmed on the appellant under the category of Banking and Other Financial Services. Definition of the same is reproduced below: "Banking and Other Financial Services" means Section 65 (12): (a) the following services provided by a banking company or a financial institution including a non-banking financial company or any other body corporate or any other person namely :- (i) financial leasing services including equipment leasing and hire-purchase; (ii) credit car services (iii) merchant banking services; (iv) securities and foreign exchange (forex) broking, (v) asset management including portfolio management, all forms of fund management, pension fund management, custodial, depository and trust services, but does not include case management; (vi) advisory and other auxiliary financial services including investment and portfolio research and advice, advice on mergers and acquisitions and advice on corporate restructuring and strategy; (vii) provision and transfer of information and data processing ; and (viii) banker to an issue services; and (ix) other financial se....
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....ts confidentiality and integrity. As per the history of SWIFT available in the said website, SWIFT started the mission of creating a shared worldwide data processing and communications link and a common language for international financial transactions. The services provided by SWIFT involves providing of information related to financial transactions viz. transfer of funds; transfer of information contained in the said message after processing the data contained therein. Data processing in any computer is a process that converts data into information. The data contained in the said financial message when presented for processing is raw data which when processed become useful information for the customers viz. banks, financial institutions etc., who then use the said processed information to debit and credit the customers accounts accordingly, i.e., funds settlement between the banks. The computer network operating systems i.e., SWIFT network, installed at BOB, SWIFT Network at Belgium and at the recipient's end, for whom the message is intended, manipulate raw data into information and likewise information systems typically take raw data as input to produce information as outpu....
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....plete in all respects, such processed data leads to settlement of funds between BOB and the recipient banks. It further appeared that messaging data through magnetic media or through communication backbone leads to data being transferred between two intended users related to the same financial transaction. 7.2 From the above detailed process involved, it is clear that the activities appear to amount to provision and transfer of information and data processing in relation to banking and other financial services, as defined under the Act and clearly covered under the entry provided in sub-clause (a)(vii) of Section 65(12) i.e. "provision and transfer of information and data processing". 7.3 As regards the contention of the appellant that SWIFT does not fall under the category of 'banking and other financial institution's as SWIFT is not engaged in the business of banking and other financial services, we find that if any person provides the service which is covered under the four corners of definition of "Banking and Other Financial Services", it shall be taxable. Moreover there is no dispute that the SWIFT is a 'body corporate' and covered under the definition of 'Banking a....