U.S. CHOUDHARY Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appeal is directed against the order passed by Commissioner of Central Excise, Kanpur demanding Service Tax of Rs. 22,615/ - under Section 68(3) read with Section 73 of the Finance Act, 1994 along with interest at the rate of 18% from the appellant Shri U.S. Choudhary a Stock Broker. In addition, he has also imposed penalty of Rs. 10,000/ - under Section 78 of the Finance Act, 1994. The demand of Service Tax and interest from the appellant and the imposition of penalty were ordered on the ground that appellant had not paid service tax in respect of three transactions of sale of shares.

(2.) APPEARING for the appellant Ms. Manjula Gupta, learned Counsel stated that the transactions in question were sales to Stock Brokers registered with Stock Exchange other than U.P. Stock Exchange with which he is registered. Service Tax is attracted only for services provided to an investor. A member of Stock Exchange is not to be considered as an investor for purpose of levy of Service Tax.

(3.) THE submissions were resisted by Shri Sanjiv Srivastava, learned Departmental Representative. He supported the impugned order. He stated that while transactions entered into between stock broker of the same exchange, it is robbing and no investor is involved and accordingly no taxable service is provided and no service tax is involved. That is not so when the transaction is between a broker registered with one Stock Exchange. This is however as Arbitrage. Here an investor is involved and levy of service tax is called for. He justified the imposition of penalty as appellant had want only suppressed the fact about collection of brokerage and evaded payment of service tax due.