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2015 (10) TMI 1735 - CESTAT MUMBAI

2015 (10) TMI 1735 - CESTAT MUMBAI - TMI - Valuation - Additional service tax liability on reimbursement of expenses of postage Appellant functions as Share Transfer Agent and Registrar to an Issue Assesee contends postage paid by appellant is duty and cannot be a part of the taxable value Revenue contends that penalties under section 76 shall be imposed as expenses of postage are incurred on services mentioned above.

Held that:- Actual expenses incurred for postages and reimbur .....

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he Respondent : Shri A.R. Krishnan, C.A. And Shri A.K. Goswami, Addl. Commissioner (AR) ORDER Per: M.V. Ravindran These two appeals are filed against Order-in-Original No. 50/STC-I/BR/10-11 dated 28.3.2011 passed by the Commissioner of Service Tax-I, Mumbai. 2. The appellant assessee has contested the confirmation of demand of Service Tax along with interest thereof and imposition of penalties under Sections 77 & 78 of the Finance Act, 1994, while Revenue is aggrieved by the impugned order o .....

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vices i.e. Share Transfer Agency and Registrar to an Issue. Investigations were initiated on the basis of intelligence that the appellants were not discharging Service Tax liability by incorrectly computing the taxable value. After an investigation, show-cause notice was issued to the appellant for short payment of Service Tax, interest thereof and penalties to be imposed for the period 1.5.2006 to 31.12.2007. The appellant contested the show-cause notice on merits as well as on limitation. The .....

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half of the various companies on whose behalf they arranged posting of various shares allotted, share certificate, balance-sheet and notice for the AGM etc. It is his submission that they are functioning as an Agent of the Client and Registrar under SEBI Act for getting his share transfer agency and Registrar to an issue. He would submit that on this very same issue, this Bench of the Tribunal in the case of Link Intime Pvt. Ltd. Vs. Commissioner of Service Tax 2015-TIOL-1406-CESTAT-MUM has held .....

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f Delhi in the case of Intercontinental Consultants & Technocrats Pvt. Ltd. 2013 (29) STR 9 (Del). 5. The learned AR, on the other hand, reiterates the findings of the adjudicating authority and submits that the expenses incurred for postage and other expenses are for the purpose of rendering the services of Share Transfer Agency and Registrar to an Issue. It is his submission that in departments appeal, it is the contention that the adjudicating authority has imposed penalties under Sectio .....

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to an Issue or otherwise. 6.2 Undisputedly, the appellant is a Share Transfer Agent and Registrar to an Issue and registered with the SEBI for other purposes. He functioned as an agent of the company, those are intending to issue share certificate and other related activities, when such companies are coming to the market for raising the capital. 6.3 On perusal of the records, we find that there is no dispute as to the fact that the amount of Service Tax that is sought to be demanded, the amount .....

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ely covered by the judgment of this Tribunal in the case of Link Intime Pvt. Ltd. (supra). We reproduce the relevant paragraphs from the said judgment: 2. The learned Chartered Accountant appearing for the appellant submits that the appellant is a Share Transfer Agent (STA in short) and Registrar to an Issue (RTI in short). As a RTI, it acts as an agent of a company in processing application for shares, dispatching allotment letters, refund orders, certificates and other related documents in res .....

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enses like printing, travelling, telephones, etc. from the company on actual basis. Service tax was paid by the appellant w.e.f. 10/09/2004 under the category of Business Auxiliary Service though not payable and subsequently under the category of RTI/STA services. Service tax was also paid on the reimbursement of other expenses for the period post 01/04/2006. However, service tax on reimbursement of postage for the period 10/09/2004 to 31/07/2007 was not paid in regular course. Therefore, the de .....

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e Securities and Exchange Board of India (Registrar to an Issue and Share Transfer Agents) Rules, 1993 and the connected regulations. The said service came under the tax net for the first time on 01/05/2006. Therefore, the question of demanding any service tax on reimbursement of expenditure would not arise at all prior to 01/05/2006, even though the appellant might have paid service tax wrongly under the category of Business Auxiliary Service. 4.2. As regards the demand towards service tax on r .....

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dering any service. Postage is an amount received by the postal department for transmission by post and cannot be considered as a consideration received by the person who is the sender of the postal article. Further, when the postage is recovered from the service receiver on actual basis by a service provider, he acts as a pure-agent and, therefore, the reimbursements made to a pure-agent is not includible in the value of taxable service rendered, as what is provided under Section 67 of the Fina .....

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