TMI Blog2017 (4) TMI 1135X X X X Extracts X X X X X X X X Extracts X X X X ..... rnover charges, VSAT connectivity charges, stamp duty etc. Categorical documentary evidence to that effect is not on record. Further, we note that the claim of the appellant/assessee to have acted as “pure agent” can be considered only on fulfillment of the conditions mentioned in Rule 5 (2) of the Valuation Rules. The main requirement for exclusion of charges when the appellant/assessee is acting as a pure agent is the amount collected from client should be passed on actual basis to third party based on a clear prior understanding. There are various conditions under the said Rule 5 (2). Only on fulfillment of all these conditions any consideration received by appellant can be excluded considering transaction under the concept of “pure agent”. The evidences to that effect are not presently on record. Matter remanded to the Original Authority for a fresh decision - appeal allowed by way of remand. - Service Tax Appeal No.132 of 2012, Service Tax Appeal No.139 of 2012 - ST/A/53074-53075/2017-CU[DB] - Dated:- 25-4-2017 - Shri S.K. Mohanty, Member (Judicial) And Shri B. Ravichandran, Member (Technical) Shri Sanjay Jain, Authorized Representative (DR) for the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have also been imposed. 2. The learned Counsel for the appellant contested the findings in the impugned order. His submission may be summarized as below :- (a) the valuation of service provided by the appellant/assessee is in terms of Section 67 of the Finance Act, 1994. Clause (a) of Explanation 1 specified that as regards brokerage service the value will include the aggregate of commission or brokerage charged by a broker on the sale or purchase of securities including the commission or brokerage paid by the stock broker to subbroker. It is the contention of the appellant/assessee that payments made as pure agent of the client on various account of other charges, like transaction charges to stock exchanges, stamp duty to the Government authorities, Demat charges etc. cannot form part of taxable value of stock brokerage service. These charges have no nexus with the brokerage commission but were paid by the appellant/assessee on behalf of the clients; (b) the charges paid to stock exchanges were covered by stock exchange service taxable w.e.f. 16/05/2008 and the same are not taxable under stock broker service previous to that date. The various amounts on which servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heading from their clients to pay for various organizations like Stock Exchange/SEBI. Their claim for the exclusion of these charges on the basis of their acting as pure agent is not sustainable in the absence of clear supporting documentary evidences to that effect. The decision of the Tribunal in LSE Securities Ltd. (supra) cannot be made applicable to the present case in the absence of clarity on factual background. 5. We have heard both the sides and perused the appeal records. The appellant/assessee were registered with the Service Tax Department and were discharging tax under various taxable entries. As already noted, the dispute in the present appeal relates to valuation of taxable services. The Revenue contend that the appellant/assessee is collecting other charges and did not pay service tax on such charges. The claim made by the appellant/assessee is that these other charges are nothing but transaction charges paid to stock exchange and turnover fee, stamp duty etc. We have perused the impugned order which examined the details of each type of such charges in terms of the claim made by the appellant/assessee. The Original Authority held that the appellant/assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 15. The correct assessable value of taxable service usually is the intrinsic value of the service provided since service commands that value only and that should only be taxed without any hypothetical rule of computation of value of taxable service under Section 67 of the Act. The other receipts a stock broker makes are irrelevant for determination of the assessable value of taxable service provided by him. Thus the test is whether a receipt of stock broker is in the nature or commission or brokerage to levy service tax. Burden of proof failed to be discharged by Revenue to bring the receipts to charge 16. The appellants in these appeals received turnover charges , stamp duty, BSE charges, SEBI fees and DEMAT charges contending that the same was payable to different authorities and claimed that the same is not taxable. But Revenue taxed the same on the ground that such receipt by stock broker was liable to tax. Revenue failed to bring out whether the turnover charges and other charges in dispute in these appeals received by appellant were commission or brokerage. The character of receipts was claimed by appellants as recoveries from investors to make payment th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese conditions any consideration received by appellant can be excluded considering transaction under the concept of pure agent . The evidences to that effect are not presently on record. While the principles laid down by the Tribunal in LSE Securities Ltd. (supra) are on the legal basis and the facts as obtained in the appeal under consideration then by the Tribunal. To apply the ratio, we find that the supporting evidence to establish the clear factual basis are to be examined. For this purpose, we find it fit and proper to set aside the impugned order and to remand the matter to the Original Authority for a fresh examination of the supporting evidences submitted/to be submitted by the appellant/assessee. The applicability of ratio of the decision of the Tribunal relied upon by the appellant/assessee is also to be examined. Since, the matter is remanded back to the Original Authority the grievance of the Revenue against the impugned order can also be looked into by the Original Authority while deciding the case afresh. 9. In view of the above discussion and analysis, we set aside the impugned order and remand the case back to the Original Authority for a fresh decision. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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