TMI Blog2018 (12) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... on. Irrespective Section 67 has undergone amendment w.e.f. 01.05.2006 but, the interpretation of Section 67 is that the value of taxable service shall be the gross amount charged by the service provider for such service and the valuation of tax service cannot be nothing more or less then the consideration paid as quidproquo for rendering such a service. The fact of the present case is that the appellants as a stock broker were admittedly providing services to the investors/ clients on their own behalf of the stock exchange and the transaction charges in addition to the brokerage charges are collected by the appellant from the clients irrespective of their own behalf or on behalf of the stock exchange - it is only in case the transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dingly registered with the Service tax Department. While conducting audit of the appellant, it was noticed that the appellant have been recovering from their customers brokerage as well as transaction charges. However, the service tax has not been paid on the gross value in terms of Sections 67 and 68 of the Finance Act, 1994 (hereinafter referred to as Act), it was found that the appellant was paying service tax on brokerage charges but not paying service tax on the transaction charges received by them from their customers. Resultantly, show cause notice No. 19419 dated 24.08.2009 for the period 2004-05 to 15.05.2008 was served upon the appellant proposing a demand of ₹ 12,02,792/- as a service tax qua the transaction charges as rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction value was not mentioned due to the bonafide belief for it not to be part the part of the gross value i.e. the part of the taxable value in addition the balance sheets and other financial statements depicting all the facts clearly have been regularly filed by the appellant. Hence, no question of alleged mis-statement and suppression till arises. The Department is alleged to have wrongly invoked the extended period of limitation. Penalty has also been wrongly imposed. The order under challenge is prayed to be set aside and appeal is prayed to be allowed. 5. Per contra ld. AR submitted that the demand has been proposed and confirmed invoking the Rule 5 of Determination of Taxable Value Rules, 2006 (The Rules hereinafter Rule 5(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expenses which are incurred while rendering the service and are reimbursed i.e. for which the service receiver has made the payments to the assessee. As per this Rule these reimbursable expenses also form part of gross amount charged. It is, therefore, has to be seen as to whether Section 67 of the Act permits the said inclusion/ exclusion of expenditures/ costs in the taxable value as has been done by Rule 5. Section 66 of the Act is the charging section as it refers to service tax to be paid at such rate of the value of taxable services referred to in sub-clauses of Section 65 and collected in the manner as may be prescribed. Thus, according to the section, service tax is to the reference to the value of service i.e. the value actuall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able. 8. The fact of the present case is that the appellants as a stock broker were admittedly providing services to the investors/ clients on their own behalf of the stock exchange and the transaction charges in addition to the brokerage charges are collected by the appellant from the clients irrespective of their own behalf or on behalf of the stock exchange. It is also apparent fact that at the relevant time no service tax was leviable on any services provided by the stock exchange and therefore tax liability arising out of the sale and purchase of securities for the purpose of service tax was to be discharged by the stock brokers only and moreover, these liabilities in any case could never has been discharged by the individual invest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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