Unique Investment Centre Vs. Cce

Unique Investment Centre vs Cce

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi Decided May 28, 2007

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Citation: sooperkanoon.com/45575
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi
Judge: R Abichandani, S T T.V.
Decided On: May 28, 2007
Subject: Service Tax

Case Summary

AI-generated summary - not the official court judgment text.

Service Tax

Key legal issue: Service Tax

Parties & Advocates

Appellant / Petitioner

Unique Investment Centre

Respondent

Cce

Legal References

Reported In: (2007)11STJ154CESTATNew(Delhi)

Excerpt

.....from the sale/purchase of the securities of a client referred by the appellant sub broker.3. according to the learned commissioner, the appellant has rendered taxable service in accordance with the provisions of sub-clause (a) of clause 105 of section 65 of the finance act. 1994. the contention of the appellant is that the sub-brokers never deal with the client on their own and the main broker is authorized to enter into agreements with the clients (investor) and issue contract notes, account statement, receipts and delivery of cheques, recovery of taxes etc.therefore, commission from the investor will be charged by the stock broker (main broker) and the broker paid a portion of such commission to the sub-broker for introducing clients to him.4. it is on record that the main broker had deposited the service tax besides issuing a certificate indicating the amount of sub brokerage thereon. in this context, a document dated 15.10.2005 issued by master capital services ltd., (main broker) which certifies that the sub-broker appellant has been paid a sum of rs. 345461/- on account of sub-brokerage during april to september 2005 was relied upon by the appellant. the show cause notice dated 17.4.2006 issued to the appellant no doubt refers to this certificate but states that since the noticee-appellant is holding the independent service tax registration number for providing the stock broking service they arc liable to discharge their service tax liability separately under the provisions of service tax act, 1994. this, in our opinion, can never be the intention of the legislature. simply holding a registration cannot make a person liable to discharge a tax which otherwise does not become payable. if that could be so, taxes alone would be the only expanding feature on this otherwise shrunken globe. prima-facie it appears that the appellant has made out a case for waiver of pre-deposit of duty demanded under the impugned order by contending that charging tax twice on.....

Full Judgment

2. The applicant challenges the Order-in-Appeal passed by the Commissioner (Appeals) on 10.10.2006. In the impugned order, the Commissioner has observed that the appellant had received remuneration from the broker on each transaction done through him which is a part of brokerage earned by the main broker from the sale/purchase of the securities of a client referred by the appellant sub broker.

3. According to the learned Commissioner, the appellant has rendered taxable service in accordance with the provisions of Sub-clause (a) of Clause 105 of Section 65 of the Finance Act. 1994. The contention of the appellant is that the sub-brokers never deal with the client on their own and the main broker is authorized to enter into agreements with the clients (investor) and issue contract notes, account statement, receipts and delivery of cheques, recovery of taxes etc.

Therefore, commission from the investor will be charged by the stock broker (main broker) and the broker paid a portion of such commission to the sub-broker for introducing clients to him.

4. It is on record that the main broker had deposited the service tax besides issuing a certificate indicating the amount of sub brokerage thereon. In this context, a document dated 15.10.2005 issued by Master Capital Services Ltd., (main broker) which certifies that the sub-broker appellant has been paid a sum of Rs. 345461/- on account of sub-brokerage during April to September 2005 was relied upon by the appellant. The show cause notice dated 17.4.2006 issued to the appellant no doubt refers to this certificate but states that since the noticee-appellant is holding the independent service tax registration number for providing the stock broking service they arc liable to discharge their service tax liability separately under the provisions of Service Tax Act, 1994. This, in our opinion, can never be the intention of the legislature. Simply holding a registration cannot make a person liable to discharge a tax which otherwise does not become payable. If that could be so, taxes alone would be the only expanding feature on this otherwise shrunken globe. Prima-facie it appears that the appellant has made out a case for waiver of pre-deposit of duty demanded under the impugned order by contending that charging tax twice on the same transaction in respect of which the main broker has already discharged his tax liability could amount to double taxation. As the applicant has made out a prima facie case for waiver of tax charged under the impugned order, the requirement of its pre-deposit is hereby waived. The stay application is allowed accordingly. Appeal shall come on its turn.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Delh... Same Parties Unique Investment Centre vs Cce Same Subject Service Tax Same Judge R Abichandani, S T T.V.