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2017 (8) TMI 1006 - AT - Service TaxTaxability - commission received as sub-broker - Held that - the facts of the appeal before us are similar to the facts in respect of the said case law in the case of Commissioner of Central Excise, Kanpur Vs P.K. Khandelwal & Company and others 2016 (1) TMI 391 - CESTAT ALLAHABAD , where it was held that the sub-broker who received commission from the main broker while main broker has paid the service tax on commission received by him cannot be once again subjected to service tax - appeal dismissed - decided against Revenue.
Issues:
1. Service tax liability of sub-brokers on commission received. 2. Interpretation of 'Business Auxiliary Service' in relation to sub-brokers. 3. Precedent set by previous Tribunal decisions on service tax liability of sub-brokers. Analysis: Issue 1: The appeal was filed by the Revenue against the Order-in-Appeal passed by the Commissioner of Central Excise & Customs, Kanpur, regarding the recovery of service tax amounting to ?5,08,862.10 from the sub-brokers on the commission received by them. The Original Authority confirmed the demand and imposed a penalty, which was appealed by the respondents. Issue 2: The ground of appeal raised by the Revenue was based on a previous Tribunal decision that classified the activity of sub-brokers in relation to the sale or purchase of securities as 'Business Auxiliary Service.' However, the respondents argued that a different Tribunal decision had established that when the main broker has paid service tax, the commission received by the sub-broker should not be subjected to a levy of service tax. Issue 3: After considering the rival contentions, the Tribunal found that the facts of the present appeal were similar to the case law where it was held that sub-brokers who received commission from the main broker, where the main broker has already paid the service tax on the commission, should not be subjected to service tax again. The Tribunal relied on the precedent set by the previous decision and dismissed the appeal filed by the Revenue. Therefore, the Tribunal upheld the decision of the Commissioner (Appeals) and ruled in favor of the respondents, stating that the sub-brokers were not liable to pay service tax on the commission received from the main broker who had already paid the service tax.
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