Custom, Excise & Service Tax Tribunal
M/S. Aditya Birla Money Ltd vs Cce & St, Chennai on 26 February, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
ST/497/2010
(Arising out of Order-in-Original No. 24/2010 dated 24.03.2010 passed by the Commissioner of Service Tax, Chennai).
M/s. Aditya Birla Money Ltd. : Appellant
Vs.
CCE & ST, Chennai : Respondent
Appearance Shri G.Natarajan, Advocate for the Appellant Shri. K. Veerabhadra Reddy, JC (AR) for the Respondent.
CORAM:
Honble Ms. Sulekha Beevi, Member (Judicial) Honble Shri Madhu Mohan Damodhar, Member (Technical) Date of Hearing/Decision: 26.02.2018 FINAL ORDER No. 40499/2018 Per Bench The facts of the case are that M/s. Aditya Birla Money Ltd., the appellants herein are providers of Stock Broking and Depository Services and obtained service tax registration under the category of Stock Broking Service. The issue in dispute relates to the demand of service tax on transaction charges levied by stock exchanges on each and every transaction carried out by the appellant, which are claimed by the appellant as reimbursable from the customers. The period of dispute is April, 2006 to November, 2008. The adjudicating authority vide impugned order dated 24.03.2010 has confirmed the proposed demand of service tax amounting to Rs.1,16,61,787/- with interest thereon and also imposed penalty of Rs. 1,20,00,000/- under Section 78 of the Finance Act, 1994. Hence this appeal.
2. On 26.02.2018, when the matter came up for hearing, Ld. Counsel, Shri G. Natarajan submitted that the transaction charges are levied under the Securities Control Regulatin Act and SEBI Guidelines; that these charges are on the transaction of purchase and sale of securities undertaken by various parties through stock brokers. That as per the SEBI guidelines, the stock brokers are entitled to charge and collect the sae from their customers; that the said transaction charges are not at all gross amount charged for the services provided by the appellant and hence no service tax is payable by the appellant. He further submitted that the demands have been confirmed on the basis of Rule 5 of the Service Tax (Determination of Value) Rules, 2006, which has been held to be ultra vires by the Honble High Court of Delhi in the case of Intercontinental Consultants and Technocrats Pvt. Ltd. Vs. UOI 2013 (29) STR 9 (Del.). Ld. Counsel further submitted that the demands upto March 2008 is hit by limitation. He places reliance on Bhayana Builders Pvt. Ltd. 2013 (32) STR 49 (Tri.-LB), wherein it has been held what is charged as a quid pro quo for the services provided alone can be subjected to service tax.
3. On the other hand, Ld. AR, Shri Veerabhadra Reddy, JC, supports the impugned order.
4. Heard both sides and have gone through the facts.
5. We find that the matter is nolonger res integra. This Bench, following the earlier decision of the Tribunal in the case of First Securities Pvt. Ltd. Vs. CST, Bangalore 2007 (7) STR 690 (Tri.-Bang.) and LSE Securities Ltd. Vs. CCE, Ludhiana 2013 (29) STR 591 (Tri.-Del.) and in the case of M/s. Shreyas Stocks Pvt. Ltd. Vs. GST & CE, Chennai South vide Final Order No. 40412/2018 dated 08.02.2018, held as follows:-
5.1 We find merit in the arguments of the Ld. Counsel. It cannot be nobodys case that the transaction charges are charged by the appellants on the clients. It is evident that these charges are required to be paid by the clients only to the stock exchange for the transactions in shares or stocks that they may have entered into on their own or through the stock brokers like the appellant herein. Merely because the appellants are collecting the said charges from their clients and remitting the same to the concerned stock exchange cannot be a reason for considering such amounts as received by them for services rendered by them. We find that this is the very ratio that has been laid down in the Tribunal decisions relied upon by the Ld. Counsel.
6. In view of the above, we do not find any reason to deviate from the ratio laid down in the decisions of the Tribunal. Therefore, we set aside the impugned order and allow the appeal with consequential benefits, if any, as per law.
(Operative part of the Order pronounced in the open Court) (MADHU MOHAN DAMODHAR) (SULEKHA BEEVI C.S.) MEMBER (TECHNICAL) MEMBER (JUDICIAL) BB 1