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2022 (2) TMI 957 - AT - Service TaxValuation of services - Brokerage Charges - whether the brokerage charges paid to the brokers/distributors by the appellants are reimbursable expenses or whether is a consideration that has to be included in the taxable value of the appellant? - reverse charge mechanism - suppression of facts - extended period of limitation - HELD THAT:- The brokerage charges have already suffered Service Tax on reverse charge basis. To make the same amount subject to Service Tax on forward basis under Asset Management Services would be levying Service Tax on the same amount twice. The appellants have consistently contended that the said brokerage charges were recovered from M/s. SMF and these are nothing but reimbursable expenses - as per Regulation 52 ibid., the appellants are entitled to charge such expenses incurred on brokerage on the mutual fund. Needless to say that the appellant, being an Asset Management Company, is bound by the SEBI Regulations. They have accounted the brokerage charges paid by them and reimbursed by M/s. SMF so as to make it practical for them to comply with the SEBI Regulations. The brokerage charges paid by the appellant is nothing but reimbursable expenses. The period being prior to 2015 (prior to amendment dated 14.05.2015), the demand of Service Tax on such reimbursable expenses cannot sustain as settled by the Hon’ble Supreme Court in the case of M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT]. Time Limitation - HELD THAT:- This Show Cause Notice has been issued alleging suppression of facts and invoking the extended period. There is no evidence put forward by the Department to establish that there is any element of fraud, wilful suppression or mis-statement of facts on the part of the appellant. Since the entire transactions were under discussion between the Department and the appellant and also considering the fact that there were other litigations with regard to the credit availed on Service Tax paid on brokerage charges, it is found that there is no factual or legal basis for invoking the extended period. Appeal allowed - decided in favor of appellant.
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