TMI Blog2018 (4) TMI 1335X X X X Extracts X X X X X X X X Extracts X X X X ..... - Held that: - on the one hand the show cause notice has demanded tax under the category of “Business Support Service” on the ground that the Appellant made available its infrastructure namely its internet based trading platform to clients of M/s RMIL and on the other hand the impugned order confirmed the demand on the ground that Appellant is providing stock broking service to investor. This amounts to confirmation of demand beyond the scope of show cause notice which is not permissible under law. Extended period of limitation - penalty - Held that: - the demand pertains to the period 2008 – 09 to 2009 – 10 is hit by limitation of time - The discharge of service tax on entire card fee by M/s RMIL clearly shows that the Appellant had bonafide belief that M/s RMIL is only liable to tax - extended period and penalty set aside. Appeal allowed - decided in favor of appellant. - ST/85076/2015 - A/85964/2018 - Dated:- 10-4-2018 - Shri Ramesh Nair, Member (Judicial) And Shri Raju, Member (Technical) Shri Gopal Mundra, C.A. for Appellant Shri Rishi Goyal, Addl. Commr. (A.R) for respondent Per: Ramesh Nair The brief facts of the case are that Appellant M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with RMIL. Investors received the service s from Appellant in accordance with Stock Broker and Client agreement . Service tax is chargeable on the taxable service provided on gross amount charged by the service provider for such service provided for a consideration. Both M/s RMIL and the Appellant are independent companies and the payment of service tax has to be made by the Appellant. Hence the present appeal by the Appellant. 3. Shri Gopal Mundra, ld. CA appearing for the Appellant submits that the Appellant is providing stock broking service to the investors and not any service to RMIL. M / s. RMIL owns the website which is used by investor to do online trading for which RMIL collects the card fee. After retaining the 5% amount the remaining is transferred to the Appellant. The amount retained by RMIL is consideration towards infrastructural service provided by it. M/s RMIL has discharged service tax on total card fees collected from customers. The Appellant is not providing any service to RMIL and that RMIL is entrusted with collection of car d fee. There is no dispute that service tax was paid by M/s RMIL on total fees on behalf of Appellant. He submits that while the SCN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in show cause notice. In para 4 (d) of SCN it has been stated that For various fees charged by M/s RMIL to its customers, M/s RMIL shall share such amount of fees with M/s RSL as mutually agreed with M/s RSL. Such fees are in consideration for the services provided by M/s RSL to M/s RMIL; whereas the actual clause in Para 6 of agreement dt.11.04.2008 is For various fees charged by RML to its customer, RM shall share such amount of fees with RSL as mutually agreed with RSL. Such fees shall be in consideration for the services provided by RSL to the customer of RML. The said sharing is mentioned in annexure A of the agreement . He submits that from the agreement it is absolutely clear that the agreement between the Appellant and M/s RMIL is on account of services provided by Appellant to customers of RMIL and therefore the service tax paid by M/s RMIL being proper discharge of service tax, no demand can be made from Appellant. He also submits that the same transaction cannot be taxed twice. The issue is of revenue neutrality as whatever service tax is charged is available as credit. He further submits that the demands are hit by limitation of time as there has been no suppressi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IL is engaged in facilitating distribution of financial products and services through its network, including its website and its clients can deal into financial products through its website. The clients has to register themselves with RMIL for the services offered by RMIL and for such services fee is paid to M/s RMIL by the client. In turn M/s RMIL has entered into agreement with RSL Appellant under which for providing stock broking and related service activity the Appellant is getting share d of fee charged by M/s RMIL from its customer as apparent from the agreement between the both. The agreement clause 6 specifically recognizes the clients as of M/s RMIL to which the services are provided by the Appellant. The sharing of fee cannot be interpreted as rendering of services by Appellant to the clients of M/s RMIL. In sharing of such fee M/s RMIL is effectively discharging service tax on full amount of card fee. M/s RMIL has retained only 5% amount as its share and the remaining 95% has been forwarded to the Appellant. This clearly shows that M/s RMIL has acted as agent of Appellant for financial services. The discharge of service tax liability has been made by M/s RMIL as it has c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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