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M/s Kundan Castings Pvt. Ltd. Versus CCE, Kanpur

2017 (9) TMI 941 - CESTAT ALLAHABAD

Taxability - commission received for distribution of mutual fund units of various mutual fund companies during the period w.e.f. 09/07/2004 to 31/03/2005 - case of appellant is that the main contractor has duly discharged service tax liability on the said commission - Held that: - similar issue decided by the Larger Bench in the case of Vijay Sharma & Co. Versus. Commissioner of Central Excise, Chandigarh [2010 (4) TMI 570 - CESTAT, NEW DELHI], where it was held that sub-brokers are not liable t .....

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Atul Gupta, Advocate for the Appellant Shri Mohd. Atlaf, Authorized Representative (DR) for the Respondent ORDER Per. Ashok Jindal The issue involved in this case is demand of service tax on commission received for distribution of mutual fund units of various mutual fund companies during the period w.e.f. 09/07/2004 to 31/03/2005. 2. The appellants had entered into an agreement with M/s V.S. Infrastructural Capital Ltd. (main contractor) as per which the main contractor were to enter into an agr .....

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some of his share of commission received to the applicants. Department issued show cause notice for demand of service tax on the commission received by the applicants from main contractor. 3. The learned Advocate for the applicant submits that as the main contractor has duly discharged service tax liability on the said commission, service tax is not liable to be paid by the applicants as Finance Act does not provide for double taxation of the services. He relied on the decision of M/s Vijay Shar .....

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fore the Larger Bench of the Tribunal in the case of Vijay Sharma & Company (supra) wherein it has been held :- 8. The dispute in all the three references is on a narrow compass. There is no dispute by either side that a sub-broker is falling under the definition of stock broker under Section 65(101) of the Finance Act, 1994 w.e.f. 10-9-2004. The definition reads as under :- (101) Stock-broker means a person, who has either made an application for registration or is registered as a stock-bro .....

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oker in connection with the sale or purchase of securities listed on a recognized stock exchange shall be taxable service from the aforesaid date. So also, a sub-broker who is registered or has made an application for registration as such under SEBI Act, 1992, is permitted to provide similar service as provided by a stock broker. The service so provided becomes taxable service under Finance Act, 1994 w.e.f. 10-9-2004. A sub-broker is thus liable to pay service for the nature of taxable service p .....

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tock-broker, the stock broker is entitled to the credit of the tax so paid on such service if entire chain of identity of sub-broker and stock broker is established and transactions are provided to be one and the same. In other words, if the main stock broker is subjected to levy of service tax on the self same taxable service provided by sub-broker to the stock broker and the sub-broker has paid service tax on such service, the stock broker shall be entitled to the credit of service tax. Such a .....

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