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2013 (7) TMI 151 - AT - Service TaxMerchant banker - taxability of various activities i.e Brokerage/Commission, IPO, Brokerage/Commission-Fixed income product, IPO Finance Fee, Processing Fee, Recovery of commission expenses under the category of Business auxiliary services, Banking & Financial Services, Business support services - Held that:- there is no element of promoting or marketing of any services of the bank nor any service has been provided to the bank by the appellant on behalf of any client. - the tax liability on the incentive or processing fees received from the Bank is held to be not taxable to Service Tax under the heading ‘Business Auxiliary Services'. No service has been rendered by the appellant to the finance company and the activity has been done on the principal-to-principal basis - thus no Service Tax is leviable on the amount received by the appellant by way of share of income from NBFC in the activity of financing. Reimbursement of common expenses in the nature of electricity and other expenses incurred commonly by the appellant - no service can be stated to have been rendered thus the appellant is not liable to Service Tax. The levy of Service Tax on the share income as the result of IOP financing received from the NBFC Company is not liable to be taxed - Service Tax in respect of Processing Fee received from the Bank also to be set aside - penalties imposed on the appellant also set aside by the court. The appeal is allowed in the favour of the assessee.
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