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2019 (5) TMI 1146 - AT - Service TaxDemand of service tax - brokerage received on IPO related service - demand set aside on the ground that the appellant is not covered by the definition as shares will become goods only if allotment was made - Scope of 'Business Auxiliary Services' as per Section 65(19) of the Finance Act, 1994 - scope of SCN - HELD THAT:- The appellant’s activity is not covered by subsection (i) as they are not promoting or marketing or selling any goods. It is only an initial / offer and until the rights are issued to the subscribers such as share certificate do not assume the character of goods. Therefore, as rightly held by the lower authority, the services of the appellant to their client are beyond the scope of sub-section (i) - Coming to the sub-section (ii), service rendered by the appellant to their clients would be chargeable to tax only if it is rendered in relation to promotion or marketing of service rendered by the clients. IPO is only an offer to the prospective buyers and therefore, it cannot be held to be a service by the company offering IPO. Therefore, we find that in either condition, the appellants are not covered by the definition under Section 65(19) of the Finance Act, 1994. The Review Order goes beyond the scope of show-cause notice and therefore, is not maintainable under law as held by Hon’ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, DELHI-III VERSUS CARRIER AIRCON LTD. [2005 (5) TMI 69 - SUPREME COURT]. The appeals survive both on merits as well as on the fact that the Revisionary Authority has traveled beyond the grounds raised in the first show-cause notice - the demand itself is not sustainable and we are not going in to the issue of limitation. Appeal allowed - decided in favor of appellant.
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