9911796707
TMI Blog2024 (11) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of audit of the records of the appellant, it was observed that the appellants had not paid service tax amounting to Rs. 53,08,970/- during the period 2010-11 to 2014-15, on foreign bank charges and finance cost paid in foreign currency in contravention of provisions of Section 66A, 68, 69 & 70 of the Finance Act, 1994, read with Rule2(1)(d)(iv), 4, 5, 6 and 7 of Service Tax Rules, 1994 and Rule 3 of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 and Notification No. 30/2012-ST dated 20.06.2012. 2. Invoking extended period of limitation, show cause notice, vide C. No. V(H)ADJ/ST/104/2015/3171 dated 20.10.2015 was issued to the appellants by the Commissioner, Central Excise Commissionerate, Jaipur, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants. Decision in the case of CCE Hyderabad v/s Chemphar Drugs and Liniments, 1989 (40) ELT 276 (SC) has been relied upon. Otherwise also demand is based on statutory documents. Extended period cannot be invoked. For the same reasons penalties also should not have been imposed. 7. On the merits of the case it is submitted that foreign banks have not provided any service to the appellants and the said bank charges retained by them cannot be termed as a consideration for providing any banking or financial service. Ld. Counsel impressed upon that service provider and service recipient relationship does exists between the foreign bank and its customer, but not between the foreign bank and the appellants. There is no contract existing bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee, however has reiterated the findings in the order under challenge. It is submitted that the appellant received banking and financial services from foreign banks. These services include the remittance and realization of money in foreign currency, for which the foreign banks charge fees as deduction. The fees charged by foreign banks is the consideration for the services provided, making them taxable under the provision of section 67 of the Finance Act' 1994, according to which "Gross amount charged" includes payment by cheque, credit card, deduction from account and any form of payment by issue of credit notes or debit notes and book adjustment, and any amount credited or debited, as the case may be, to any account, whether calle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Foreign Bank, upon the contract entered in relation to the export. Foreign Bank deducts certain amounts, in case there is deficiency in the documents or there are breach of any terms and conditions entered between the parties and this burden was passed on to the appellant as bank charges. This amount was reflected in the accounts of the appellant under the head 'Foreign Bank Charges, 16. We are of the opinion that these facts shows that Appellant who has booked the sale, instead of reducing the amounts released against such sale, booked the same under the head charges/ deductions levied by the Foreign Banks just to distinguish such deductions from the actual export proceeds. As such, the Foreign Bank of the customer located outside Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents were negotiated. It does not have any direct connection/ nexus with the Foreign Bank of the Buyer When the provider of service i.e. 'the Foreign Bank' and recipient of service i.e. 'the Buyer' both are located outside India, there is no question of taxing such service in India as the said service has been provided outside the taxable territory and outside the purview of Section 66B which is the charging section for levy of service tax. 18. Hon'ble Tribunal in the case of Greenply Industries Ltd. VS CCE [2015 (38) S.T.R. 605 (Tri.- Del] has been held that there is no document showing foreign banker charging any amount directly from assessee and the assessee cannot to be treated service recipient and Service Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst payment of excise duty in respect of its clearances of final products. We rely upon the judgment in the case of JET Airways (I) Ltd. Vs. CCE [2016 (44) STR-465 (Tri-Mumbai)] 21. Thus issue is no more res-integra. It stands decided in favour of the assessee. The Commissioner (Appeals) is held to have wrongly ignored the decisions as quoted above. 22. On technical ground of limitation we observe that SCN has been issued on 20.10.2015 for the period FY 2010-11 to 2014- 15. The normal period of limitation is eighteen months from the "relevant date". Hence, the demand for the period prior to 31.03.2014 in respect of Finance Cost paid to foreign banks in foreign currency is time barred. Demand in respect of bank charges is for the period ..... X X X X Extracts X X X X X X X X Extracts X X X X
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