TMI Blog2022 (12) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... CHNICAL) Shri Amal Dave, Advocate for the Appellant Shri Tara Prakash, Assistant Commissioner (AR) for the Revenue. ORDER The issue involved in the present case is that whether the appellant acting as Stock Broking Company are liable to pay service tax on various charges such as Computer to Computer Linkage charges, Commission on Public Issue and Inter Settlement charges. 2. Shri Amal Dave, learned Counsel appearing on behalf of the appellant submits that identical issue in the appellant s own case has been decided by this Tribunal in their favour vide order No. A/11854-11858/2018 dated 09.04.2018 therefore the impugned order is not sustainable and the same may be set-aside and the appeal be allowed. 3. Shri Tara Prakash, learned Assistant Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. 4. On careful consideration of the submissions made by both the sides and perusal of record, we find that in the light of decision of this Tribunal vide order No. A/11854-11858/2018 dated 09.04.2018 wherein the present appellant is also one of the appellants, has decided the same issue in their favour. The said decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o investors by stock brokers in connection with sale or purchase of securities listed on a recognized stock exchange, Legislature, up to the year 2001 intended that aggregate of the commission or brokerage charged to the investors by stock broker for sale or purchase of securities shall be taxed under the charging provision of the Act. So also the commission or the brokerage paid by stock broker to any sub-broker was made liable to tax. Such receipts were measure of value for taxation. The valuation provision incorporated in Section 67 of the Act envisaged that aggregate of commission or brokerage only shall be measure of tax. Basis of taxation was provided in express terms and no implied taxation was permitted by law. 12.2 Law is well settled that there is nothing like an implied power to tax. The source of power which does not specifically speak of taxation cannot be so interpreted by expanding its width as to include therein the power to tax by implication or by necessary inference. The judicial opinion of binding authority flowing from several pronouncements of the Hon ble Supreme Court has settled these principles : (i) in interpreting a taxing statute, equitable conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 67 provides the basis to determine the value of taxable service. No ambiguity persists in Section 67 of the Act. No receipt other than commission or brokerage made by a stock broker is intended to be brought to the ambit of assessable value of service provided by stock broker. Charging section in a taxing statute is to be construed strictly. As is often said, there is no equity about tax. If the words used in a taxing statute are clear, one cannot try to find out the intention and the object of the statute [Ref : Govt. of Andhra Pradesh v. P. Laxmi Devi - (2008) 4 SCC 720 - AIR 2008 SC 1640]. 13. Learned Counsels arguing the matter are correct to say that budget speech of the Hon ble Finance Minister made clear what was intended to be taxed in respect of service provided by stock broker. It was submission of the learned Counsel Shri Mittal that insofar as stock brokers are concerned, brokerage or commission charged by them only from value of taxable service and that was intended to be taxed by the budget of 1994-95. This was the proposal in Part B of the Budget presented to the Parliament on 28th February, 1994. Reading of the legislative intent from the budget speech and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipt 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 thereof to respective authorities in accordance with statutory provisions of Indian Stamp Act and SEBI guidelines and were not received towards consideration in the nature of commission or brokerage of sale or purchase of securities. While burden of proof was on Revenue to establish that such receipts were in the nature of commission or brokerage or had the characteristic of such nature that was failed to be discharged. The character of commission or brokerage is remuneration for the service of stock broking provided by a stock broker to investors. Therefore, aforesaid charges realized by appellants were not being of commission or brokerage are not taxable and shall not form part of gross value of taxable service. On merit, all the appellants succeed on the fundamental principles of taxation. Therefore, other contentions on merit made in respective appeals are not considered in this order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, mobilising recommending investments in bonds issued by banking and non-banking companies. These activities were clarified to be falling under the category of Business Auxiliary Services by Board s Circular No. 66/15/2003-S.T., dated 5-11-2003. Relying on the same, Show Cause Notice was issued to the respondent proposing demand of Service Tax and proposing imposition of penalties. Commissioner dropped the proceedings relying on the decision of the Hon ble High Court of Andhra Pradesh in the case of Karvy Securities Ltd. v. Union of India reported in 2006 (2) S.T.R. 481 by which the circular dated 5-11-2003 was set aside. 4. Ld. SDR, drawing our attention in the grounds of appeal submits that the said decision of the Hon ble High Court stands appealed against before the Hon ble Supreme Court. Fairly, he concedes that he is not aware that any order has been passed by Hon ble Supreme Court setting aside the judgment or any stay has been granted. 5. Ld. Advocate submits that though appeal has been admitted no order has been passed by the Hon ble Supreme Court so far. Ld. Advocate for the respondent also relies on the decision in the case of Commissioner of S.T. Delhi v. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Section 2(2) of Public Debt Act, 1944, constitute a Government security and the bonds were issued by the Government for raising a public loan. Therefore, these is no doubt that the tax savings bonds issued by the RBI and sold by the appellant bank is a Government Security. For this transaction in Government securities, the appellant bank has received a brokerage for sale of the security. From the Circular dated 10-8-2010 issued by the C.B.E. C., it is clear that there is no Service Tax liability on underwriting fee or underwriting commission received by the primary dealers for dealing in Government securities; the same logic would apply in respect of brokerage also. Further, this Tribunal in the case of Canara Bank and Union Bank of India cases (cited supra) has held that the sale of RBI bonds would amount to statutory/sovereign function and cannot be subjected to any tax liability. 4.2 Following the ratio of these decisions and the clarification issued by the C.B.E. C. as well as by the RBI, we hold that the impugned demands are not sustainable. Accordingly, the same is set aside. The appellant is also entitled to consequential relief, if any, in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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