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TMI Blog2020 (2) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... he definition of export of service - the appellants are not liable to pay service tax as the service rendered by the appellant fall in the definition of export of service. Service charges paid to Foreign Banks against the service received by the appellant-bank - Service charges paid to Master Card International - HELD THAT:- The said services fall in the definition of Import of Service and the same was made liable to service tax on reverse charge basis with effect from 18.4.2006 in view of the decision of the Bombay High Court in the case of Indian National Ship Owners Association [2008 (12) TMI 41 - BOMBAY HIGH COURT]. Therefore, up to 18.4.2006, appellants are not liable to pay service tax on reverse charge basis. Extended period of limitation - HELD THAT:- Commissioner himself has admitted that short-payment of service tax is not deliberate but owing to the reason of system failure. Further, the Commissioner has dropped the penalty under Section 78 by resorting to Section 80 of the Finance Act. Once the penalty under Section 78 is dropped, it means that the Original Authority did not find that there was an intention to evade payment of service tax on the part of the appellant. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l for the appellant submitted that in the present appeal, following issues are involved, which are shown in the table below: Sl. No. Issue involved Period Involved Amount of Service Tax 1 Commission received by appellant from Money Exchange Houses abroad 10.9.2004 to 31.7.2007 ₹ 35,46,188 2 Service charges paid to Foreign Banks against the service received by the appellant-bank 10.9.2004 to 31.7.2007 ₹ 17,46,216 3 Service charges paid to Master Card International 10.9.2004 to 31.7.2007 ₹ 10,43,822 4.1 As far as issue No.1 is concerned, the learned counsel submitted that the appellant received the consideration from the Exchange Houses abroad for services provided by the appellant. The case of the appellant is that the transaction is 'Export of Services' and consequently, there cannot be any charge of service tax on the appellant for the said activity. He also submitted that the Commissioner in paragraph 10.1 and 10.2 of the impugned order has found that the recipient user of the service is the customer of the Exchange House who is within India and therefore, the service is not provided outside India, so as to qualify it as export of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count of the appellant. Learned counsel submitted that now it is settled law that when a payment is received in Indian rupee through a foreign bank, the same needs to be treated as received in convertible foreign exchange. He further submitted that this issue is also settled by the Tribunal in various decisions cited below: * Support.com India Pvt. Ltd. vs. Commissioner of ST: 2018 (9) GSTL 260 (Tri.-Bang.) * Mitsubishi Heavy Industries India Pvt. Ltd. vs. Commissioner of Central Excise: 2017 (5) GSTL 321 (Tri.-Del.) * Sun-Area Real Estate Pvt. Ltd. vs. Commissioner of Service Tax: 2015 (39) STR 897 (Tri.-Mumbai) 4.3 Learned counsel also submitted that the observations of the Commissioner in paragraph 10.3 that the payment made by the appellant was not under protest, is erroneous because the appellant after having paid the service tax disputed the liability right from the reply to the show-cause notice itself and therefore, the payment made by the appellant needs to be treated as only payment under protest in view of the various decisions cited below: * Opel Alloys Pvt. Ltd. vs. Commissioner of Central Excise: 2010 (249) ELT 408 (Tri.-Del.) * Deepak Fertilizers & Petroch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Rajasthan Renewable Energy Corpn. Ltd.: 2018 (15) GSTL 661 (Raj.) * Rochem Separation Systems (India) P. Ltd. vs. Commissioner of Service Tax, Mumbai: 2015 (39) STR 112 (Tri.-Mumbai) * Commissioner of Service Tax, Mumbai-IV vs. Rochem Separation Systems (I) P. Ltd.: 2019 (23) GSTL 446 (Bom.) 7. He also submitted that once the Commissioner has dropped the penalty under Section 78 by invoking the provisions of Section 80 of the Finance Act, clearly shows that there is no intention to evade payment of service tax and hence, the penalties under Section 76 and 77 and invocation of extended period is not sustainable in law. 8. On the other hand, the learned AR defended the impugned order and submitted that extended period has been rightly been invoked because the appellant did not disclose all the material facts and has suppressed the material facts which came to the notice after the Department intervened. He also relied upon the following decisions in support of his submissions. * P.K. Ghosh & Sons vs. Commissioner of Service Tax, Kolkata: 2017 (3) GSTL 429 (Tri.-Kolkata) * Commissioner of Central Excise, Visakhapatnam vs. Mehta & Co.: 2011 (264) ELT 481 (SC) 9. After consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed." Therefore, by following the ratio of the above said decisions, we are of the considered opinion that the appellants are not liable to pay service tax as the service rendered by the appellant fall in the definition of export of service. 9.1 As far as issue No.2 and 3, namely, service charges paid to foreign banks against the service received by the appellant-bank and service charges paid to Master Card International are concerned, we find that the said services fall in the definition of 'Import of Service' and the same was made liable to service tax on reverse charge basis with effect from 18.4.2006 in view of the decision of the Bombay High Court in the case of Indian National Ship Owners Association cited supra, which was upheld by the Hon'ble apex court also and accepted by the Department. Therefore, we hold that up to 18.4.2006, appellants are not liable to pay service tax on reverse charge basis. 9.2 As far as invoking of extended period of limitation is concerned, we note that the Commissioner himself has admitted that short-payment of service tax is not deliberate but owing to the reason of system failure. Further, we note that the Commissioner has dropped the penal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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