TaxTMI 
TaxTMI 
2018 (8) TMI 1179
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....f 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 peri....
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....Twenty Two Lakhs Ninty Nine Thousand Two Hundred Seventy only] on M/s Raj Petro Specialityes Pvt. Ltd, Survey No. 146/2/3 Madhuban Dam Road, Village Karad, Silvassa, under Section 78 of Finance Act, 1994. However, if the above amounts of service tax are along with interest within 30 days of receipt of this order, the said penalty imposed shall be treated as 25% penalty should also be paid amount of service tax provided that the amount of said 25% penalty should also be paid within 30 days of receipt of the order intems of proviso to Section 78 of Funance Act, 1994. (5) I impose penalty of Rs. 5,000/- [Five Thousand Only] on M/s Raj Petro Specialties Pvt. Ltd Survey No. 146/2/3/ Madhuban Dam Road , Village-Karad, Silvassa u....
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....aid 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 appellant is not liable to pay service tax. He also referring the Board Circular No. 20/2013-14-ST-I (Commissioner of ST-I, Mumbai T.N.) dated 10.02.2014, relied upon the following judgment of this Tribunal: Greenply Industries Ltd. Vs. CCE, Jaipur-I 2015 (38) STR 605 (Tri.-Del.) Raymond Ltd. Vs. CST, Mumbai-I....
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....he foreign bank and the bank in India. Even the amount of charges collected by foreign bank is informed only to the bank in India. The exporter or the importer in India comes to know about these charges through their own bank in India. In fact the most interesting aspect is that the importer or the exporter in India is not even aware of the quantum of charges which are charged by the foreign bank. Further, in case of export transactions, if the remittance 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 ....
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....ses, services are provided by the foreign bank to the Indian bank and not to the Indian Exporter. [M/s. Gracure Pharmaceuticals Ltd. v. Commissioner of Central Excise, Jaipur-I - 2013 (32) S.T.R. 249 (Tri.-Del.), M/s. Gujarat Ambuja Exports Ltd. v. Commissioner of Service Tax, Ahmedabad - 2013 (30) S.T.R. 667 (Tri.-Ahmd.)]. 6. It is therefore clarified that, in cases where the foreign banks are recovering certain charges for processing of import/export documents regarding remittance of foreign currency, the banks in India would be treated as recipient of service and therefore required to pay Service Tax." From the above Circular it is abundantly clear that when the Indian Banks are collecting charges including the charges of For....
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....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....