TMI Blog2024 (1) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... banking and financial service. From the reading of the definition of banking and financial services and the meaning of financial institution, it appears that the services rendered by the appellant would not fall under the category of service provided by a banking or a financial institution or any other body corporate or commercial concern. In the case in hand, it is found that it is undisputed as to the appellant is only giving tips/information related to shares. Appellant are not giving any advice to its customers related to purchase or sell of share. It is on record that appellant are doing research and giving information to their customers on the basis of their research. They have not been guiding or suggesting any course of action to his customers. The appellant neither adviced nor guided the customers as to what quantity of share they can buy, when can they buy, when can they sell the share etc. Appellant have neither provided any broking or portfolio services nor has any details of the shares held by his customers - thus merely providing tips/information related to shares will not encompass the ingredients of Banking and Other Financial Services . In the absence of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant from clients was to be paid by the clients either through deposits in the Bank Accounts provided by the appellant or through cheque or credit cards. On the intelligence gathered by DGCEI that the Appellant has not paid appropriate service tax on Banking and Financial Service rendered by them, an investigation was initiated against the appellant, wherein statements of officials of the appellant were recorded and various information relating its business was sought. Pursuant to the aforesaid investigation show cause notices were issued to the appellant, proposing to recover service tax by classifying the services provided by the appellant under the Banking and Other Financial Services . The show cause notices also proposed to recover applicable interest under Section 75 and to impose penalties under Section 76, 77 78. In adjudication, the adjudicating authority vide impugned orders confirmed the demand of service tax as proposed in show cause notices alongwith applicable interest and penalty. Aggrieved by these OIOs, the appellant are before this Tribunal. 2. Shri Jigar Shah and Shri Amber Kumrawat, Learned Advocates appeared for the appellant. Shri Jigar Shah su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne person, esp. a lawyer, to another or to give an opinion or counsel or recommend a plan of a course of action, also to give notice to encourage, information or acquaint . Thus appellant is not giving any advice to its customers. The Appellant is doing research and giving information to his customers on the basis of his research. The Appellant is not guiding or suggesting any course of action to his customers which is an essential ingredient to make his action/activities an advice. The prices of shares changes constantly at the NSE and the BSE and knowing when to buy and when to sell is most important. In such volatility knowing the course of action is most important. Appellant neither provides any broking or portfolio services nor has any details of the shares held by his customers. The appellant is only giving information and doing nothing beyond that. Thus the question of providing any investment and portfolio research services also does not arise. In order to provide investment and portfolio research services to its customer the appellant first has to be aware about the portfolio of the customers i.e the shares held by his customers. The Appellant has no such information about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether the same would fall within the definition of any taxable services. It is settled principle of law that unless and until the clear analysis of the activity done by the assessee is carried out, demand of service tax cannot be confirmed. He placed reliance on the following decisions: United Telecom 2011(22)STR 571 (Tri. Bang) Swapnil Asnodkar 2018(10)GSTL 479 (Tri.-Mumbai) Subham Electricals Vs. CCE ST. Rohtak -2015(40)STR 1034 Deltax Enterprises Vs. CCE, Delhi -2018(10) GSTL 392 Balaji Enterprises 2020(33)GSTL 97 (Tri. Del) Kafila Hospitality Travels Pvt. Ltd. Vs. Commissioner, Service Tax, Delhi -2021 (3) TMI 773 CESTAT New Delhi (LB) 2.7 He also submits that the burden of proving the taxability of a service casted upon the department has not been discharged. Thus, no demand of service tax can be sustained in the present case. To support his argument, Ld. Advocate relied upon the decisions in the case of Commissioner of Customs (Import), Mumbai Vs, Dilip Kumar and Company Ors., -2008(7)TMI 1826-SC. 2.8 He further submits that during the course of investigation of the matter, the statement of director of the appellant was recorded which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus, cum-tax benefit should have been allowed while quantification of the demand. Further, in any case if the duty liability is confirmed against the appellant, the appellant would be entitled to avail cenvat credit of the input services availed to provide the services rendered by the appellant. Appellant has availed the services of SMS service providers, Services of Technical software providers, Telephone internet Service and Travel Agent Services. All these services have been used to provide the output service. Thus if the tax demand is confirmed the appellant would be entitled to cenvat credit of the input services used for providing the output services as well, which could be utilized by the appellant for payment of applicable service tax thereon. 2.11 He also argued that the present show cause notice issued by the Additional Director General, DGCEI, Ahmedabad Zonal Unit in the present case as well as the impugned proceedings initiated vide the same are without any Jurisdiction and contrary to the provision of the Finance Act, 1994. Accordingly, the proceedings initiated vide the present show cause notice as well as in the impugned order become liable to be dropped on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India Ltd. Vs. CCE, 1988(33)ELT 551 (Tri.) Singh Brothers Vs. CCE, Indore 2009-TIOL-189-CESTAT DEL Homa Engineering Works Vs. Commissioner of C.Ex., Mumbai -2007(7) STR 546 (Tri. Mum) 3 On the other hand, Learned Superintendent (AR) Shri P.K. Singh appeared for the Department and supported the findings in the impugned orders. He placed reliance on following decisions: CST, Mumbai Vs. Crisil Ltd. 2018(8)GSTL 16 (Bom) Bank of Baroda Vs. CST, Mumbai-I -2016(43)STR 141 (Tri. Mum) DSP Merrill Lynch Ltd. Vs. CST, Mumbai -2016(44)STR 436 (Tri. Mum) HSBC Securities Capital Markets (I) Pvt. Ltd. Vs. CST, Mumbai 2014(33)STR 530 (Tri.-Mum) KR Alloys Ltd. Vs. CCE, Calicut -2009(13)STR 584 (Tr. Bang) Cellebrum Technologies Ltd. Vs. CCE, Chandigarh -2015-TIOL-1098-CESTAT-DEL Raghunath International Ltd. Vs. Union of India -2012(280)ELT 321 (All) Tata Steels Ltd. Vs. CST, Mumbai I 2016(41)STR 689 (Tri.Mum) N V Marketing Pvt. Ltd. Vs. CST Delhi-I- 2018(17)GSTL 257(Tri. Del) Standard Chartered Bank Others Vs. CST, Mumbai 2013(2)ECS (186)(Tri. Mum) 4 We have carefully considered the submissions made by both the sides and perused the reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er auxiliary financial services including investment and portfolio research and advice, advice on mergers and acquisitions and advice on corporate restructuring and strategy; (vii) provision and transfer of information and data processing; (viii) banker to an issue services; and (ix) other financial services, namely, lending, issue of pay order, demand draft, cheque, letter of credit and bill of exchange, transfer of money including telegraphic transfer, mail transfer and electronic transfer, providing bank guarantee, overdraft facility, bill discounting facility, safe deposit locker, safe vaults, operation of bank accounts; 4.1 We also find that the financial institution has been defined as under : (c) financial institution means any non-banking institution which carries on as its business or part of its business any of the following activities, namely :- (i) the financing, whether by way of making loans or advances or otherwise, of any activity other than its own; (ii) the acquisition of shares, stock, bonds, debentures or securities issued by a Government or local authority or other marketable securities of a like nature; (iii) letting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution . In this factual and legal scenario, the conclusion of the lower authorities that the appellant is a financial institution as defined in the RBI Act cannot be sustained. Accordingly, we set aside the impugned order and allow the appeal with consequential relief, if any, in accordance with law . 4.3 It can be seen from the above reproduced judgment and the ratio laid down therein that in order to get covered an acitivity under the banking and financial services, an assessee has to be either a banking company or financial institution or a non-banking company or any other commercial concern rendering the various services as enshrined in the definition of banking and other financial services. To fall within the tax net, the appellant has to be a banking company or a financial institution including a non-banking company. Obviously, the appellant is not a banking company or a non-banking financial company. As per the definition of financial institution only when the appellant carries on business of acquisition of shares, bonds, debentures or securities issued by a Government or Local Authority or other marketable securities of a like nature, asset management including p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anking and Other Financial Services . In view of the foregoing, we are of the view that appellant s activity is not covered under the disputed taxable service of Banking and other financial Services . 4.5 We also find that CBEC vide Circular No. 83/1/2006-S.T., dated 4-7-2006 while clarifying as to the services provided by Department of Posts in respect of money orders, operation of bank accounts, issue of postal orders, etc., clarified as under :- Banking and other financial services are defined under Section 65(12). Such services provided to a customer by a banking company or a financial institution including a non-banking financial company or any other body corporate or any other person to a customer are liable to Service Tax under Section 65(105)(zm). The expression any other person appearing in Section 65(105)(zm) is to be read ejusdem generis with the preceding words. The expression other financial services appearing under Section 65(12)(a)(ix) is a residuary entry and includes those services which are normally rendered by banks or financial institutions. Hence, banking and other financial services provided by a banking company or a financial institution or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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