TaxTMI 
TaxTMI 
2022 (12) TMI 1146
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....the Indian Bank for the Services provided by the Foreign Bank on reverse charge basis. Learned counsel pointed out that this issue has been examined in the following judgments : • Raj Petro Specialties Pvt Ltd Vs. CCE - 2018 (8) TMI 1179- CESTAT Ahmedabad • Cylwin Knit Fashions & Others Vs, CCE - 2017 (9) TMI 96 - CESTAT Chennai • Greenply Industries Ltd Vs. CCE - 2018 (38) STR 605 ( Tri. Delhi) 3. Learned AR relies on the impugned order. 4. We have considered the rival submission. We find that the issue under examination in this case is if the appellant is required to pay service tax on reverse charge basis for the charges paid by them in respect of the foreign currency transaction between their local foreign banks engaged in facilitating the transfer of foreign exchange. It is noticed that the matter has been examined in detail in the case of Raj Petro Specialties Pvt Ltd Vs. CCE - 2018 (8) TMI 1179- CESTAT Ahmedabad. In the said case following has been observed:- The appellant are engaged in the manufacture of excisable goods namely, different type of Industrial Oil, Lubricating Oil and Petroleum Jelly falling under chapter 2....
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..../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 under Section 77 of the Finance Act, 1994. (6) I impose penalty of Rs. 200/- per day for every day during which ffailure in payment of service tax continued or at the rate of 2% of such ta, per month, whichever is higher, strating with the first day after the due date till the date of actual payment of the outstanding amount of service tax on M/s Raj Petro Specialties Pvt. Ltd. Survey No. 146/2/3, Madhuban Dam Road, Village-Karad, Silvassa under Section 76 of Finance Act, 1944 for the period from 01.04.2....
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....issue the Board has clarified in the Circular dated 10.02.2014 as referred by the Ld. Counsel in the said Circular, the relevant para of the Circular is reproduced below: "4. In order to understand the obligations of the foreign banks, the banks in India and importer/exporter, the said URC 522/UCP 600 were examined. Article Nos. 4, 8, 10, 11, 16, 21, 26 of URC 522 and Article Nos. 3, 4, 7, 8, 9, 13, 37 of UCP 600, read with other relevant Articles in these two brochures are relevant for the present issue. A combined reading of these Articles shows that there is an implied contract between a bank in India and a foreign bank, whereby, the foreign bank recognizes only the Bank in India for providing their services and for collection of their charges. In case of any clarification on any issue regarding their activity, there is always correspondence between the 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 ....
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.... 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 Foreign Banks toward import and export of the goods of their client. In such case, as regard the service tax liability under Reverse Charge Mechanism, the Indian Banks are recipient of service, therefore, the appellant cannot be held as recipient of service provided by Foreign Banks to the Indian Banks. Accordingly, the appellant is not liable to pay service tax under Reverse Charge Mechanism. This very same issue has been considered by this Tribunal in the case of Greenply Industries Ltd (Supra), wherein Division Bench of this Tribunal passed following order: "The appellants are exporters. They receive the export proceeds through ING Vyasa Bank. The foreign bank through which the payment had given channelised charged some amount from the appellant's bank ING Vyasa Bank which in turn recovered the same from the appellant. The department demanded Service Tax on the amount which the foreign bank charge....