2019 (2) TMI 867

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....modhar, Member (Technical) Ms. S. Bharkavi, Advocate for the Appellant Shri. A. Cletus, ADC (AR) for the Respondent ORDER Per Bench : The issue involved in both these appeals being the same, they are heard together and disposed of by this common order. 2.1 Brief facts are that the appellant is maintaining Nostro/Vostro accounts with foreign banks to help their customers dealing i....

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....e appellant, Ld. Counsel Ms. S. Bharkavi submitted that the Vostro account is an account maintained by an overseas bank/non-resident Exchange House with a domestic/local bank (appellant herein) that allows the former to make payments in local currency. Transactions through Vostro accounts are governed by RBI. Similarly, SWIFT (Society for Worldwide Inter-bank Financial Telecommunication) operates ....

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....ad held that the Vostro transactions are not subject to levy of service tax. Though the levy of service tax on SWIFT transactions was upheld, the Tribunal had set aside the penalty observing that it is an interpretational issue. 4. On the other hand, Ld. AR Shri. A. Cletus appearing on behalf of the respondent supported the findings in the impugned Order. 5. Heard both sides. 6. The appel....

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....ction 65(12) of the Finance Act, 1994 and held that it is a taxable activity. Following the same, we are of the opinion that the demand raised in respect of SWIFT transactions requires to interference. 8.2 However, with regard to the penalty, we take note of the fact that the issue was contentious for a long time and litigations were pending before the Tribunal as well as various High Courts. T....