TaxTMI 
TaxTMI 
2017 (3) TMI 180
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.... by officers against the appellants for non-payment of Service Tax during the period 2006-2007 to 2007-2008 in connection with mobilization of funds in foreign exchange by issuing convertible bonds by using the services of foreign Merchant Banks. Revenue felt that the appellant failed to discharge the Service Tax on reverse charge basis under Section 66A of the Finance Act, 1994, in respect of Merchant Banking services availed by them in raising funds in foreign exchange, taxable under the category of "banking and other financial services" Proceedings initiated against the appellant concluded by the impugned order. The original authority confirmed the Service Tax demand of Rs. 1,13,13,760/- and imposed equal amount of penalty under section ....
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....not contrary to in their earlier stand. Further, he also submitted that there are three lead managers and only two acted as underwriting managers. As such, commission paid to lead manager providing banking and financial services contested for Service Tax liability. 5. We have heard both the sides and perused the records. 6. In terms of the contract, relevant items of which were reproduced and examined in the impugned order, it is clear that underwriting commission constitutes 99%. The finding of the original authority that in composite contract the essential nature of the contract will decide the obligation of service. This principle has not been appropriately applied to the facts of the present case. When 99% of the commissio....
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....case as stated by JLSL, that the issue was wholly subscribed by JPMS, the Lead Manager service was a minimal part of the contract in this particular case. Further "Underwriting Service" is specified in a sub-clause of Section 65(105) which occurs earlier than the sub-clause in which Lead Manager's Service occurs. So going by the criterion laid down in Section 65A(c) of Finance Act, 1994, the service will get classified under "Underwriting Services". Therefore we hold the view that the "Underwriting Service" rendered by JPMS to JLSL is distinct from the Lead Manager service provided. Since the underwriter service is to be subjected to tax under Section 66A of Finance Act 1994 taking into consideration the place of performance as per Rule 3 o....