9911796707
TMI Blog2014 (9) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... Exchange Board of India Ltd. under the Merchant Bankers Regulations, 1992 as a merchant banker. They rendered merchant banking services to M/s. Himachal Futuristic Communications Ltd. for the private placement of equity shares against which 25 lakhs shares were allotted. For this service, they received consideration from M/s. Himachal Futuristic Communications Ltd. (HFCL). The department was of the view that the activity undertaken by the appellant is management consultancy service and therefore a notice was issued demanding Service Tax of Rs. 13,12,500/- along with interest thereon and also proposing to impose penalties under the provisions of Finance Act, 1994. Notice was adjudicated and order dated 3-2-2009 was passed classifying the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, the service rendered by them as a merchant banker comes under the tax net only w.e.f. 16-8-2002 and prior to that date, there was no liability to pay any Service Tax on the said activity. Therefore, the impugned demand is not sustainable in law. The learned consultant also drew our attention to Ministry's letter F. No. BII/I/2000-TRU, dated 9-7-2001 wherein in Para 2.3, the Ministry had clarified as follows : "Merchant banking services 2.3 Banks and Financial institutions including NBFCs providing merchant banking services are governed by the SEBI (Merchant Banker) Rules, 1992 and SEBI (Merchant Bankers) Regulations, 1992. As per these rules and regulations, merchant banking service is any service provided in relation to issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an organisation in an organised and systematic manner. To be able to do this efficiently and effectively, management typically involves carrying out a host of activities, functions and tasks and at different levels. Thus management encompasses both strategic and operational level functioning and would include tasks such as planning, organising, staffing, directing, controlling and coordinating. Management also invariably involves designing organisational structure around functions such as marketing, manufacturing, research and development and finance and/or business area such as product groups or geographical markets. Thus management of any organization involves carrying out a wide variety of clearly defined activities across a number o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for consideration and disposal. 7. From the records of the case, it is seen that the activity undertaken by the appellant is private placement of shares of the client M/s. HFCL; for the said activity they have received a consideration @ 1% of the value of the shares so placed. From the circular dated 9-7-2001 of the Board, the scope of the term 'merchant banking services' has been explained in detail. From the said circular it can be seen that merchant banking services is any service provided in relation to issue management, either by making arrangement regarding selling, buying or subscribing securities as manager, consultant, advisor or rendering corporate advisory service in relation to such issue management. The activity undertak ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
