TaxTMI 
TaxTMI 
2024 (1) TMI 398
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....en by the appellant to their client either through emails, Phones or SMS. The fee charged by the appellant from clients was to be paid by the clients either through deposits in the Bank Accounts provided by the appellant or through cheque or credit cards. On the intelligence gathered by DGCEI that the Appellant has not paid appropriate service tax on "Banking and Financial Service' rendered by them, an investigation was initiated against the appellant, wherein statements of officials of the appellant were recorded and various information relating its business was sought. Pursuant to the aforesaid investigation show cause notices were issued to the appellant, proposing to recover service tax by classifying the services provided by the appellant under the 'Banking and Other Financial Services'. The show cause notices also proposed to recover applicable interest under Section 75 and to impose penalties under Section 76, 77 & 78. In adjudication, the adjudicating authority vide impugned orders confirmed the demand of service tax as proposed in show cause notices alongwith applicable interest and penalty. Aggrieved by these OIOs, the appellant are before this Tribunal. 2. Shri Jigar ....
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.... Law Dictionary (7th edition) the word 'advice' has been defined to mean guidance offered by one person, esp. a lawyer, to another or to give an opinion or counsel or recommend a plan of a course of action, also to give notice to encourage, information or acquaint". Thus appellant is not giving any advice to its customers. The Appellant is doing research and giving information to his customers on the basis of his research. The Appellant is not guiding or suggesting any course of action to his customers which is an essential ingredient to make his action/activities an advice. The prices of shares changes constantly at the NSE and the BSE and knowing when to buy and when to sell is most important. In such volatility knowing the course of action is most important. Appellant neither provides any broking or portfolio services nor has any details of the shares held by his customers. The appellant is only giving information and doing nothing beyond that. Thus the question of providing any investment and portfolio research services also does not arise. In order to provide investment and portfolio research services to its customer the appellant first has to be aware about the portfolio of t....
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....s further been confirmed in the impugned order without even analyzing the nature of activities allegedly carried out by the appellant and examining whether the same would fall within the definition of any taxable services. It is settled principle of law that unless and until the clear analysis of the activity done by the assessee is carried out, demand of service tax cannot be confirmed. He placed reliance on the following decisions: • United Telecom 2011(22)STR 571 (Tri. Bang) • Swapnil Asnodkar - 2018(10)GSTL 479 (Tri.-Mumbai) • Subham Electricals Vs. CCE& ST. Rohtak -2015(40)STR 1034 • Deltax Enterprises Vs. CCE, Delhi -2018(10) GSTL 392 • Balaji Enterprises 2020(33)GSTL 97 (Tri. Del) • Kafila Hospitality & Travels Pvt. Ltd. Vs. Commissioner, Service Tax, Delhi -2021 (3) TMI 773 -CESTAT New Delhi (LB) 2.7 He also submits that the burden of proving the taxability of a service casted upon the department has not been discharged. Thus, no demand of service tax can be sustained in the present case. To support his argument, Ld. Advocate relied upon the decisions in the case of Commissioner of Customs (Imp....
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.... Chennai) 2.10 Without prejudice, he further submits that even if the appellant is liable to pay any service tax on the amount received from their service receivers, the tax calculation itself is incorrect. The amount received by the appellant has to be treated as inclusive of the amount of service tax payable. Thus, cum-tax benefit should have been allowed while quantification of the demand. Further, in any case if the duty liability is confirmed against the appellant, the appellant would be entitled to avail cenvat credit of the input services availed to provide the services rendered by the appellant. Appellant has availed the services of SMS service providers, Services of Technical software providers, Telephone & internet Service and Travel Agent Services. All these services have been used to provide the output service. Thus if the tax demand is confirmed the appellant would be entitled to cenvat credit of the input services used for providing the output services as well, which could be utilized by the appellant for payment of applicable service tax thereon. 2.11 He also argued that the present show cause notice issued by the Additional Director General, DGCEI, Ahmedabad Z....
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....on, the invocation of extended period of limitation is not justified. He placed reliance on the following decisions: • Pushpam Pharmaceuticals Company Vs. CCE -1995(78)ELT 401(SC) • Ispat Industries Ltd. Vs. CCE 2006(199)ELT 509 (Tri.-Mum) • NIRC Ltd. Vs. CCE 2007(209)ELT 22(Tri. Del.) • Chemicals & Fibres of India Ltd. Vs. CCE, 1988(33)ELT 551 (Tri.) • Singh Brothers Vs. CCE, Indore 2009-TIOL-189-CESTAT -DEL • Homa Engineering Works Vs. Commissioner of C.Ex., Mumbai -2007(7) STR 546 (Tri. Mum) 3 On the other hand, Learned Superintendent (AR) Shri P.K. Singh appeared for the Department and supported the findings in the impugned orders. He placed reliance on following decisions: • CST, Mumbai Vs. Crisil Ltd. - 2018(8)GSTL 16 (Bom) • Bank of Baroda Vs. CST, Mumbai-I -2016(43)STR 141 (Tri. Mum) • DSP Merrill Lynch Ltd. Vs. CST, Mumbai -2016(44)STR 436 (Tri. Mum) • HSBC Securities & Capital Markets (I) Pvt. Ltd. Vs. CST, Mumbai - 2014(33)STR 530 (Tri.-Mum) • KR Alloys Ltd. Vs. CCE, Calicut -2009(13)STR 584 (Tr. Bang) • Cellebrum ....
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....terest charges; and (iv) the lessee is entitled to own, or has the option to own, the asset at the end of the lease period after making the lease payment; (ii) * * * * (iii) merchant banking services; (iv) Securities and foreign exchange (FOREX) broking, and purchase or sale of foreign currency, including money changing; (v) asset management including portfolio management, all forms of fund management, pension fund management, custodial, depository and trust services, (vi) advisory and other auxiliary financial services including investment and portfolio research and advice, advice on mergers and acquisitions and advice on corporate restructuring and strategy; (vii) provision and transfer of information and data processing; (viii) banker to an issue services; and (ix) other financial services, namely, lending, issue of pay order, demand draft, cheque, letter of credit and bill of exchange, transfer of money including telegraphic transfer, mail transfer and electronic transfer, providing bank guarantee, overdraft facility, bill discounting facility, safe deposit locker, safe vaults, operation of bank ac....
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....table securities of a like nature, the appellant can be categorized as a financial institution. Merely because the appellant is registered as a stock broker with the SEBI, which is a statutory requirement the appellant cannot be considered as a financial institution. If that be so, all stock brokers dealing in shares/securities would be financial institutions which is a totally wrong interpretation of the statutory definition of a financial institution. There is also no evidence available on record to show that the appellant has been registered under the RBI Act as a "financial institution". In this factual and legal scenario, the conclusion of the lower authorities that the appellant is a financial institution as defined in the RBI Act cannot be sustained. Accordingly, we set aside the impugned order and allow the appeal with consequential relief, if any, in accordance with law". 4.3 It can be seen from the above reproduced judgment and the ratio laid down therein that in order to get covered an acitivity under the banking and financial services, an assessee has to be either a banking company or financial institution or a non-banking company or any other commercial con....
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....anking and Other Financial Services'. In the absence of any advisory and other auxiliary services including investment and portfolio research and advice, advice on mergers and acquisitions and advice on corporate restructuring and strategy activity undertaken by the appellant, we find that the services rendered by the appellant will not fall under the category of banking and financial services. Further, it can be seen from the above reproduced definition that the activity undertaken by the appellant for providing tips/ information related to shares is not included in the definition of "Banking and Other Financial Services". In view of the foregoing, we are of the view that appellant's activity is not covered under the disputed taxable service of "Banking and other financial Services". 4.5 We also find that CBEC vide Circular No. 83/1/2006-S.T., dated 4-7-2006 while clarifying as to the services provided by Department of Posts in respect of money orders, operation of bank accounts, issue of postal orders, etc., clarified as under :- "Banking and other financial services are defined under Section 65(12). Such services provided to a customer by a banking company or a finan....