Retrospective service tax exemption for commodity trading intermediaries covered sub-broker services and defeated the demand.

Retrospective exemption under Notification No. 3/2014-S.T. was applied to services rendered by intermediaries and sub-brokers in commodity trading. The activity was treated as falling within the notification's description of services provided by an authorised person or sub-broker to a member of a recognised or registered association in relation to a forward contract for the relevant period. As the exemption squarely covered the disputed services, the service tax demands were not sustainable and were set aside. Pre-deposit was waived and the appeals were taken up for final disposal.

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Issues: Whether the services rendered by the appellants as intermediaries/sub-brokers in relation to commodity trading were covered by the retrospective exemption under Notification No. 3/2014-S.T. dated 03.02.2014, and whether the service tax demands could be sustained.

Analysis: The exemption notification was treated as governing the services provided by an authorised person or sub-broker to a member of a recognised or registered association in relation to a forward contract for the specified period. The appellants' activity of acting as intermediaries in commodity trading fell within that description. Since the notification squarely covered the activity in dispute, the demands were not maintainable. The pre-deposit requirement was also waived and the appeals were taken up for final disposal.

Conclusion: The issue was decided in favour of the appellants, and the service tax demands were set aside by granting the benefit of the retrospective exemption.

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