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TMI Blog2014 (1) TMI 1611X X X X Extracts X X X X X X X X Extracts X X X X ..... BI and sold by the appellant bank is a Government Security. For this transaction in Government securities, the appellant bank has received a brokerage for sale of the security. From the Circular dated 10/08/2010 issued by the CBE&C, it is clear that there is no service tax liability on underwriting fee or underwriting commission received by the primary dealers for dealing in Government securities; the same logic would apply in respect of brokerage also - sale of RBI bonds would amount to statutory/sovereign function and cannot be subjected to any tax liability - Following decision of Canara Bank Vs. CST, Bangalore [2012 (6) TMI 274 - CESTAT, AHMEDABAD] - Decided in favour of assessee. - ST/113/2008 - Final Order No. A/2315/2013-WZB/C-I(CST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore us. 2 #. The Ld. Consultant for the appellant submits that the issue is covered by the decision of this Tribunal in the case of Canara Bank Vs. CST, Bangalore reported in 2012 (28) STR 369 (Tri-Ahmd) and Union of Bank of India Vs. CCCE ST reported in. He also submits that the CBE C vide Circular No. 126/08/2010-ST dated 10/08/2010 had clarified that Government securities are sovereign securities having zero default risk. RBI only manages the issue and the primary dealers registered with the RBI deals in Government Securities as part of the Government market borrowing program. The said circular also clarified that service tax liability does not arise on underwriting fee/underwriting commission received by primary dealers during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity. From the Circular dated 10/08/2010 issued by the CBE C, it is clear that there is no service tax liability on underwriting fee or underwriting commission received by the primary dealers for dealing in Government securities; the same logic would apply in respect of brokerage also. Further, this Tribunal in the case of Canara Bank and Union Bank of India cases (cited supra) has held that the sale of RBI bonds would amount to statutory/sovereign function and cannot be subjected to any tax liability. 4.2 Following the ratio of these decisions and the clarification issued by the CBE C as well as by the RBI, we hold that the impugned demands are not sustainable. Accordingly, the same is set aside. The appellant is also entitled to conseque ..... X X X X Extracts X X X X X X X X Extracts X X X X
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