TaxTMI 
TaxTMI 
2018 (10) TMI 641
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....s been imposed. Appeal wise details of relevant facts are below: Sr. No Appeal No. Category Period Covered Remarks Amount 1. ST/69/2009 I. CTCL Charges II. Depository Services III. Commission from Mutual Funds 1.4.2001 to 31.03.2004 SCN issued on 11.10.2006 Rs.72,434/- Rs.9,73,299/- Rs.5,522/- 2. ST/166/2010 I. RBI bond, Interest on RBI relief bond and income from Public issue (Banking and other Financial Services). II. CTCL Charges 1.10.2006 to 30.09.2007 SCN issued on 28.03.2008 Rs.50,734/- Rs. 4920/- 3. ST/494/2011 Penalty under Sec 76 of the Finance Act, 1994 (Connected with Appeal No. ST/166/2010) 1.10.2006 to 30.09.2007 SCN issued on 07.03.2011 SCN issued for imposition of penalty under Sec 76 Rs.200/- per day 4. ST/765/2011 I. CTCL charges (Stock Broker services) II. Income on Public issues and RBI bonds (BAS) III. Commission from Banks for promotion of their bonds (BAS) 2005-06 to 2009-10 SCN issued on 20.10.10, Rs.4,81,134/- Rs.3,06,821/- Rs. 1,044/- (2005-06) Rs. 16,776/- 5. ST/771/2011 I. Income from public issues a....
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....he sides and examining the record, we find that in these appeals the service tax has been demanded on various charges/commissions/income, which are dealt under the following heads:- (A) Service Tax on CTCL charges and Depository Charges :- We find that these charges relate to payments made by the appellant for the CTCL computer program. Such a program provides a single point trading access to equity, commodity and currency derivatives markets. The NSE (National Stock Exchange) charges fees for giving this facility to the brokers. The broker then shares this service with the customers and charges the customers to recover the fees paid to NSE by way of reimbursements. The Depository/Demat Charges are levied by the Depository under Depositories Act, 1996. The appellants collect these charges from customers and pay the same to depository participants like CDSL or NSDL. It has been held by this Tribunal in the case of Span Caplease Pvt Ltd (supra) that such charges, which are collected separately and in accordance with various statutory bodies regulations and not retained by the stock brokers but deposited with the authorities concerned (e.g. National Stock Exchange), such charges ca....
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....cannot be interpreted on any presumption or assumption. A taxing statute has to be interpreted in the light of what is clearly expressed; it cannot imply anything which is not expressed; it cannot import provisions in the statute so as to supply any deficiency; (ii) before taxing any person it must be shown that he falls within the ambit of the charging section by clear words used in the section; and (iii) if the words are ambiguous and open to two interpretations, the benefit of interpretation is given to the subject. 12.3 There is nothing unjust in the taxpayer escaping if the letter of the law fails to catch him on account of the Legislatures failure to express itself clearly. It is well settled that power to tax cannot be inferred by implication; there must be a charging section specifically empowering the State to levy tax. When these are the principles laid down by Apex Court in the case of State of West Bengal v. Kesoram Industries Ltd. - (2004) 10 SCC 201, bringing a strange element to the ambit of tax shall be without authority of law. There was no scope provided by Section 67 of the Act to expend its width to have artificial measure of levy brin....
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....in Section 67 of the Act does not leave any room for implication of ambiguity. Therefore, express grant of the statute no way leaves scope for implication to make the statutory grant ineffective. Law being well settled that there is no intendment in taxation and the State has to discharge its burden of proof to bring the subject into tax, there is no scope to bring any other element of receipt other than brokerage or commission to the scope of assessable value in respect of service provided by stock brokers. 14. Normally value is derived from the price and value is the function of the price. This is conceptual meaning of value. Section 67 is the sole repository of law governing value of taxable service provided by the stock broker. Any charge on the non-includible elements other than brokerage or commission will result in arbitrary taxation. Similarly receipts not in the nature of commission or brokerage should not be taxed in disguise. The brokerage or commission service provided by stock broker shall be liable to service tax. That being consideration for taxable service provided, become assessable value of such service. Because tax is compulsory exaction, no subject shal....
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....Similar view has been expressed recently by the Tribunal in M/s Consortium Securities Pvt Ltd.s case (supra). We do not find any reason to deviate from the ratio laid down in the aforesaid judgments of this Tribunal. We are also of the view that the allegation of the department that the demat charges collected by the brokers are banking and financial service, hence taxable, also devoid of merit in as much such charges are collected by the Appellant and paid to the depository participants viz. CDSL/NSDL who are authorised to levy such charges under the Depositories Act,1996. Thus, in view of the aforesaid precedent, we do not find merit in impugned orders and accordingly set aside. The appeals are allowed with consequential relief, if any, as per law." Accordingly, we hold that the aforesaid charges realized by the appellant are not in the nature of commission or brokerage and that being so; the same shall not form part of the value of taxable services. (B) Service Tax on income from distribution of Mutual funds and Commission from Banks/Companies for investment in their Bonds:- As rightly pointed out by the Ld. Advocate, in appeal nos. ST/765/2011 and ST/771/2011, the demand ....
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....) S.T.R. 628 (Tri.-Del.) holding similar view. 6. We find that the Commissioner has dropped the proceedings on the ground that the Circular dated 5-11-2003 of the Board which was the basis for issue of Show Cause Notice stands set aside by the Hon'ble High Court of Andhra Pradesh. The said judgment of the Hon'ble High Court has not been set aside or stayed. Under these circumstances, we do not find any infirmity in the order of the Commissioner." Same view has been taken by this Tribunal in the case of P.N. Vijay Financial Services Pvt Ltd. - 2008 (12) STR 628. In view of the above, the demand of service tax on account of income from distribution of mutual funds and selling bonds issued by banks/companies is not sustainable and the same is set aside. (C) Service Tax demand on income from RBI bonds:- We find that the issue of liability to pay the service tax on commission received from sale of RBI bonds is no longer res integra and has been settled by this Tribunal in favour of assessee in the case of Enam Securities Pvt Ltd (supra) and HDFC Bank Ltd (supra). In this regard, in the case of Enam Securities Pvt Ltd (supra), it was held as under: "4.1 Unlike other banks,....