Custom, Excise & Service Tax Tribunal
M/S.A.K.Capital Services Ltd vs Cce, Delhi-I on 21 November, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI-110066
BENCH-DB
COURT III
Service Tax Appeal No.ST/1158/2011-ST [DB]
[Arising out of Order-in-Appeal No.312-Appl/S Tax/Div-I/ Delhi-I/2010/178 dated 08.04.2011 passed by the Commissioner (Appeals), Central Excise, Delhi-I]
For approval and signature:
HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
HONBLE MR. B. RAVICHANDRAN, MEMBER (TECHNICAL)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s.A.K.Capital Services Ltd. Appellant
Vs.
CCE, Delhi-I Respondent
Present for the Appellant : Mr.A.K. Batra, Advocate
Present for the Respondent: Mr.Ranjan Khanna, D.R.
Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
HONBLE MR. B.RAVICHANDRAN, MEMBER (TECHNICAL)
Date of Hearing/Decision: 21.11.2016
FINAL ORDER NO. __55840/2016____
PER: B.RAVICHANDRAN
The appeal is directed against the order dated 08.04.2011 of Commissioner (Appeals), Delhi-I. The appellants are engaged in providing various taxable services. The dispute in the present case relates to amount received on account of (a) arranging loans for various clients and receiving a loan fee for such services, (b) enabling the distribution of initial public offer (IPO) and receiving brokerage for such service and (c) certain reimbursable expenditure towards stationary, telephone, postage etc. not included for taxation under the category (b).
2. The ld. Consultant for the appellant stated that the demand in respect of (a) above is for the period 01.04.2003 to 09.09.2004 and he has drawn our attention to the definition of Banking and other Financial Services applicable during the relevant period. It is his case that none of the category of services mentioned therein were provided by the appellant. Regarding the brokerage on IPO, he submitted that this can never be taxed under BAS as there is a clear taxable entry for such taxes introduced only w.e.f. 01.05.2006. For such service they cannot be considered as commission agents and they are not promoting anybodies business.
3. The ld. AR submitted that the appellate authority examined the issue and he reiterated the findings of the lower authorities.
4. We have heard both the sides and perused the appeal records. On the first issue, we find that the Revenue seems to confirm the demand on the loan fee received by the appellant for arranging loans for the various clients. The impugned order held that such services are in the nature of Auxiliary Financial Services and as such are taxable. We find under the category (vi) of DOFS the services taxed or advisory and other auxiliary financial services including investment and portfolio research and advise, advise on managers and acquisitions and advise on corporate restructuring and strategy. Examining the scope of service rendered by the appellant, we find this category has no connection to such services. There is neither an advisory role nor auxiliary financial service with reference to investment etc. We further note that the impugned order mentioned about other financial services which were added under the category of BOFS only w.e.f. 18.04.2006. Even such other financial services appear to have no application to the present case.
5. Regarding the appellants tax liability under BAS for the amount of brokerage received for distributing IPO for clients, we find the same cannot be covered under Business Auxiliary Service during the relevant time.
6. A reference can be made in this regard to the decisions of the Tribunal in the case of M/s. Consortium Securities Pvt. Ltd. vs. CST, New Delhi (Final Order No.54021/2016 dated 06.10.2010), CCE, Hyderabad vs. Sathguru Management Consultants Pvt. Ltd. reported in 2007 (7) S.T.R. 654 (Tri.-Bang.) and CCE, Indore vs. Ankit Consultancy Ltd. reported in 2007 (6) S.T.R. 101 (Tri. Del.).
7. We find that the services Registrar to an issue and share transfer agent more appropriately deal with the services rendered by the appellant. These taxable services were introduced only w.e.f. 01.05.2006 whereas, the demand in the present case is for the period prior to that date. As such, we find that the impugned order is not justifiable on tax liability on these two accounts. Since the tax liability under BAS itself is found to be not tenable, the inclusion of reimbursable expenditure for such tax does not arise.
8. In view of above discussion and analysis, the impugned order is set aside and the appeal is allowed.
[Dictated and pronounced in the open Court)
(B. RAVICHANDRAN) (S.K. MOHANTY)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
Anita
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