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TMI Blog2013 (7) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... ment fee of Rs. 10 lakhs and Rs. 4,27,90,000/- for private placement of unlisted shares. Since the placement of listed shares was only taxable, the appellant did not discharge any service tax on the unlisted shares. A show-cause notice dated 04/01/2002 was issued to the appellant demanding service tax on the above transaction amounting to Rs.21,89,500/- alongwith interest for the delayed payment amounting to Rs. 12,02,278/- upto January 2002. The show-cause notice did not mention under what category the service tax demand was made. The appellant vide letter dated 01/02/2002 wrote back to the department stating that the above proceeds have been received by the appellant in respect of sale or purchase of securities not listed in a recognized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant Banking activities undertaken by them. The Ld. Adjudicating authority vide order dated 26/07/2004 held that the activity undertaken by the appellant comes under the category of "Management Consultancy Service" and therefore, the appellant is liable to pay service tax on the said activity under the said category. It was held in the said order that the appellant had suppressed facts of rendering advisor and financial services in respect of aforesaid transaction and therefore, the extended period o time is invocable. Accordingly, demands were confirmed along with interest and also imposing penalty under Section 76, 77 & 78 of the Finance Act, 1994. The appellant filed an appeal before the lower appellate authority, who upheld the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anization under Section 65 (21) of the Finance Act, 1994. Private placement of shares, by no stretch of imagination can be categorized as management consultancy service as defined in law. He also relied on the decision of this Tribunal in the case of CCE, Chennai Vs. Sundaram Finance Ltd., reported in 2007 (7) STR 55 (Tri-Chennai) where in a similar set of facts the activity of advising and financial transaction, portfolio administration, etc., were held to be classifiable under "Business Auxiliary Service" and not under the Management Consultancy Service. Therefore, he prays for allowing the appeal. 5. The Ld. Dy. Commissioner (AR) appearing for the Revenue reiterates the findings of the lower authorities. 6. We have carefully considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artment. If that be so, for the period prior to 2001, we do not understand how the department can classify the same activity under Management Consultancy service. By placing shares in the private domain, no advice or technical assistance, relating to conceptualizing, devising, development, modification, rectification or up-gradation of any working system of any organization could said to have been rendered by the appellant. The decision of this Tribunal in the Sundaram Finance case (supra) also supports his view. In view of the above, we find that the classification done by the department of the transaction of private placement of shares under management consultancy service has no basis and is not in accordance with the law. Accordingly, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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