TaxTMI 
TaxTMI 
2016 (11) TMI 1293
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....the basis of investigation undertaken by Revenue the appellant, who, is already registered with the Service Tax Department for providing stock broking services, was issued a show cause notice dated 15/7/09 for demand of service tax to the tune of Rs. 1,13,10,230/-. After the due process of adjudication the Commissioner confirmed service tax demand of Rs. vide the impugned order. Out of this amount, the appellant has admitted a demand to the tune of Rs. 72,555/-. The rest of the demand is being challenged in the present appeal. The grounds of appeal are mainly as follows . (i) a demand to the tune of Rs. 28,07,537/- has been made under stock broker services. These are towards transaction charges received for the period prior to 16/5/08. The....
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....onsultant for the appellant as well as Shri Sanjay Jain, learned DR for the Revenue. 3. The learned Consultant reiterated the grounds of appeal, whereas the learned DR reiterated the grounds in the impugned order. 4. In the grounds of appeal, the demand has been assailed under three different parts. We also propose to deal with the appeal on the same lines. (a) Stock Broker Services :- These are liable to service tax under Section 65 (105A) under which service tax will be payable on the commission received by the stock broker from the investors towards provision of the stock broking services w.e.f. 16/5/08. An additional service was introduced to levy service tax on stock exchange services. The stock brokers carried out transactions of ....
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....ground that such receipt by stock broker was liable to tax. Revenue failed to bring out whether the turnover charges and other charges in dispute in these appeals received by appellant were commission or brokerage. The character of receipts was claimed by appellants as recoveries from investors to make payment thereof to respective authorities in accordance with statutory provisions of Indian Stamp Act and SEBI guidelines and were not received towards consideration in the nature of commission or brokerage of sale or purchase of securities. While burden of proof was on Revenue to establish that such receipts were in the nature of commission or brokerage or had the characteristic of such nature that was failed to be discharged. The character ....
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.... Circular clarification as follows :- "2.1 In a similar manner, delayed payment charges received by the stock brokers are not includible in taxable value as the same are not the charges for providing taxable services. Such charges are on account of delay in making payments by the service recipient to the service provider and are in the nature of a penal charge for not making the payment within stipulated time. Such amounts are not includible in the taxable value for charging Service Tax. This principle will also apply to other service providers". Since the issue stands clarified in favour of the appellant, we are of the firm opinion that the demand of service tax on this ground needs to be set aside. (c) Business Auxiliary Service :- A ....
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....sues" should be an incidental auxiliary support service for initial public offer of shares of companies who want to raise capital from the market. (ii) Similarly, the service of "Share Transfer Agents" are also an incidental or auxiliary support service for purchase of shares. (iii) In view of the above position, during the relevant period, these services would come under the category of "Business Auxiliary Services" 4. Heard the learned DR, Shri Anil Kumar and the learned Counsels for the Respondents S/Shri K. S. Ravi Shankar and Ashok Deshpande. 5. It was urged that these two services came under the service tax net only with effect from 1-5-2006. My attention was drawn to the Finance Ministers speech and the Board's Circular is....