2015 (12) TMI 267 - AT - Service Tax

Denial of benefit of exemption Notification No. 3/2014-S.T., dated 3-2-2014 - Held that - M/s. Geojit Financial Services Ltd. as a broker registered with National Stock Exchange and Bombay Stock Exchange offers a trading platform for the investing customers either directly or indirectly through business associates while M/s. Geojit Commodity Services Ltd. offers the same option in relation to future trading on a recognized commodity exchange with which it is registered as a member. The demands in this case on the appellant have arisen on the ground that the appellants have acted as sub-brokers for commodity trading. Notification No. 3/2014-S.T. exempts service tax payable on the services provided by an authorized person or sub-broker to the member of a recognized association or a registered association in relation to a forward contract during the period from 10-9-2004 to 30-6-2012. - Decided in favour of assessee.

Summary

Issues involved: Interpretation of Notification No. 3/2014-S.T. for exemption of service tax on services provided by sub-brokers for commodity trading.

Analysis:
The Appellate Tribunal CESTAT BANGALORE, comprising Shri B.S.V. Murthy, Member (T) and S.K. Mohanty, Member (J), consolidated multiple appeals due to a common issue. The Tribunal noted that the demands on the appellants were based on their role as sub-brokers for commodity trading. The key contention revolved around the applicability of Notification No. 3/2014-S.T., dated 3-2-2014, which provided retrospective exemption from service tax for services rendered by authorized persons or sub-brokers to members of recognized associations in relation to forward contracts during a specified period. The appellants had agreements with entities offering trading platforms for investing customers, and the exemption notification covered the activities undertaken by the appellants as sub-brokers for commodity trading.

The Tribunal emphasized that the exemption notification effectively addressed the services provided by the appellants, aligning with the activities specified in the notification. By invoking the retrospective exemption, the Tribunal waived the requirement of pre-deposit and proceeded to make a final decision on the appeals. The Tribunal's decision to allow all the appeals with consequential relief, if any, to the appellants was based on the clear coverage of their activities under the exemption notification. The operative portion of the order was pronounced in open court on 25-11-2014, marking the resolution of the appeals in favor of the appellants based on the interpretation and application of the relevant exemption provisions.