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2013 (12) TMI 971 - AT - Service TaxStay Application - Demand confirmed on the ground that the additional amount collected by the appellants (stock-broker) from their clients as transaction charge is part of service charges and this amount cannot be excluded from the gross value - Held that - Tribunal in the case of First Securities Pvt. Ltd. Vs Commissioner - 2007 (6) TMI 33 - CESTAT, BANGALORE held that amounts collected towards transaction charges by the assessee cannot be equated with the brokerage or commission. In the case of LSE Securities Ltd. Vs CCE Ludhiana - 2012 (6) TMI 364 - CESTAT, New Delhi , the Tribunal held that the amount received by the assesssee under the head of turnover charges, stamp duty, BSE charges, SEBI fees and DEMAT charges could not be taxed. Ld.AR relied upon the decision of the Tribunal in the case of Sriram Insight Share Brokers Ltd. Vs CST Kolkata - 2008 (6) TMI 185 - CESTAT, KOLKATA wherein part deposit was directed. We find prima facie Tribunal in the final order held that this transaction charges should not be included in the taxable value - Prima facie case in favour of assessee - Stay granted.
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Tax liability on transaction charges collected by the stockbroker. 3. Interpretation of previous Tribunal decisions regarding taxation of turnover charges. Analysis: 1. The appellant filed a COD application seeking condonation of a 2-day delay in filing the appeal. The LD. AR raised concerns about discrepancies between the COD application and the appeal verification. The appellant's counsel acknowledged the error and requested condonation. The Tribunal, after considering the submissions, allowed the COD application and condoned the 2-day delay. 2. The appellant, a stockbroker registered with the National Security Exchange (NSE), faced a tax demand of Rs.1,75,080/- along with interest and penalty. The dispute arose from the treatment of transaction charges collected from clients. The adjudicating authority contended that these charges were not included in the taxable value. The appellant argued that they acted as agents, collecting and paying the charges to NSE on behalf of clients. The LD. Commissioner (Appeals) noted that the appellant, not the buyers or sellers, paid the transaction charges. 3. The Tribunal referred to previous decisions to analyze the taxation of similar charges. In the case of First Securities Pvt. Ltd. Vs Commissioner and LSE Securities Ltd. Vs CCE Ludhiana, the Tribunal held that certain charges could not be taxed. Citing the decision in Sriram Insight Share Brokers Ltd. Vs CST Kolkata, the LD.AR sought to differentiate the nature of the charges. The Tribunal found a prima facie case for waiving the predeposit of the tax amount, interest, and penalty. Consequently, the predeposit was waived, and recovery stayed during the appeal's pendency. This detailed analysis of the judgment covers the issues of delay condonation, tax liability on transaction charges, and the interpretation of relevant Tribunal decisions, providing a comprehensive understanding of the legal reasoning and outcome.
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