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2024 (1) TMI 398 - AT - Service TaxClassification of services - Banking and Other Financial Services - providing of tips/information related to shares of various companies which are traded at National Stock Exchange and Bombay Stock Exchange to it’s clients - time limitation - Cum tax value for quantification of the demand - HELD THAT:- In the present matter undisputed facts are that the appellant are providing tips/information related to shares of various companies traded in NSE and BSE and collecting fees for sending the aforesaid tips/information from the clients. Revenue authorities and Ld. Commissioner are of the view that such activity undertaken by the appellant would fall under category of “advisory and other auxiliary financial services including investment and portfolio research and advice, advice of mergers and acquisitions and advice on corporate restructuring and strategy’” as enshrined in the definition of banking and financial service. From the reading of the definition of banking and financial services and the meaning of financial institution, it appears that the services rendered by the appellant would not fall under the category of service provided by a banking or a financial institution or any other body corporate or commercial concern. In the case in hand, it is found that it is undisputed as to the appellant is only giving tips/information related to shares. Appellant are not giving any advice to its customers related to purchase or sell of share. It is on record that appellant are doing research and giving information to their customers on the basis of their research. They have not been guiding or suggesting any course of action to his customers. The appellant neither adviced nor guided the customers as to what quantity of share they can buy, when can they buy, when can they sell the share etc. Appellant have neither provided any broking or portfolio services nor has any details of the shares held by his customers - thus merely providing tips/information related to shares will not encompass the ingredients of ‘Banking 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, the services rendered by the appellant will not fall under the category of banking and financial services. Time Limitation - HELD THAT:- The transaction of the appellant alleged activities are recorded in their books of account. Therefore there is no suppression of fact with intent to evade payment of service tax on the part of the appellant. Therefore the demand of service tax is clearly hit by limitation of time and the service tax demand for the extended period is not sustainable on the ground of time bar also in terms of Section 73(1) of the Finance Act, 1994. Cum tax value for quantification of the demand - HELD THAT:- It is settled law beyond any doubt that while calculating any service tax demand, the gross value of the service invariably has to be considered as cum tax and the service tax amount has to be deducted to arrive at the assessable value for calculating demand of service tax. Hence, the learned adjudicating authority has seriously erred in not providing the benefit of cum tax value while calculating the service tax demand in the present case. The appellant’s activity is not covered under the taxable service ‘Banking and other financial Services’ - the impugned order set aside - appeal allowed.
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