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2018 (8) TMI 563 - HC - Service TaxCommercial concern or not - demand of Service Tax - Whether, the Tribunal was justified in holding that the applicant is a commercial concern as per section 65(105)(zzb) of the Finance Act, 1944 and is liable to pay service tax for the period from 1.7.2003 to 1.3.2005 of ₹ 36,935/- whereas the appellant was working as an individual, in getting investments in mutual funds on commission basis? Held that - Merely because the appellant has referred in the his address as Capital consultancy, even if it is a proprietor ship firm, it is an individual - the applicant will not be commercial concern in view of clause 65(105) (zzb) of the Finance Act, 1944. Appeal allowed - decided in favor of assessee.
Issues:
Challenge to Tribunal's order dismissing the appeal; Interpretation of section 65(105)(zzb) of the Finance Act, 1944; Liability to pay service tax for specific period; Appellant's status as an individual or commercial concern. Analysis: The appellant challenged the Tribunal's order dismissing the appeal, raising a question of law regarding the interpretation of section 65(105)(zzb) of the Finance Act, 1944. The appellant, acting as a service provider for investment of money, received commission on investment amounts falling under Business Auxiliary Services. The appellant did not pay service tax amounting to ?70,308/- for the period from 01.07.2003 to 31.03.2005. A show cause notice was issued, leading to the demand confirmation of Service Tax and interest recovery, without imposing any penalty under relevant sections of the Finance Act, 1994. The appellant contended that in similar individual cases, the department had dropped the demand. The court noted that despite the appellant referring to the address as Capital Consultancy, even if it operates as a proprietorship firm, it remains an individual. Consequently, the court held that the appellant does not qualify as a commercial concern under section 65(105)(zzb) of the Finance Act, 1944. Therefore, the court ruled in favor of the assessee, stating that the appellant, being an individual service provider, is not liable to pay service tax as a commercial concern. As a result, the appeal was allowed, overturning the Tribunal's decision.
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