Brief Fact of The Case: The appellant/assessee is a distributor of mutual fund units and receives commission from mutual fund companies or asset management companies. The commission received by the appellants from the said companies stand taxed by the authorities below on the ground that they have provided Business auxiliary services to the mutual fund company. The appellant/assessee submits that it is recipient of such services, which is liable to pay service tax in terms of rule2(1)(d)(vi) of Service Tax Rules, 1994.
Held: Tribunal held that in respect of above services recipient of services is required to pay service tax. Hence the appellant/assessee is not required to pay service tax as it is provider of services. Tribunal also held that if service tax does not stand paid by mutual fund companies or asset management companies, proceedings have to be started against the companies itself and the fact whether they have paid or not paid will not transfer the liability to the mutual fund distributor.
CESTAT, PRINCIPAL BENCH, NEW DELHI
RAJ RATAN CASTINGS PVT. LTD.
Versus
COMMISSIONER OF CUS. & C. EX., KANPUR
Final Order No. ST/574/2011(PB) and Stay Order No. ST/740/2011(PB), dated 18-10-2011 in Application No. ST/Stay/653/2011 in Appeal No. ST/353/2011
DEPARTMENTAL CLARIFICATION CITED C.B.E. & C. Circular No. 96/7/2007-S.T., dated 23-8-2007
[Order per : Archana Wadhwa, Member (J) (for the Bench) (Oral)]. – After dispensing with the condition of pre-deposit of Service Tax and penalty, we proceed to decide the appeal itself inasmuch as only a short issue is involved.
2. The appellant is a distributor of mutual fund units and receives commission from mutual fund companies or asset management companies. The commission received by the appellants from the said companies stand taxed by the authorities below on the ground that they have provided Business auxiliary services to the mutual fund company.
3. Learned advocate appearing for the appellants draws our attention to the definition appearing under Rule 2(1)(d)(vi). For better appreciation the Rule is being reproduced as under :-
“Definitions.
2(1) In these rules, unless the context otherwise requires, –
(d) “Person liable for paying the service tax “means, –
(vi) in relation to business auxiliary service of distribution of mutual fund by a mutual fund distributor or an agent, as the case may be, the mutual fund or asset management company, as the case may be, receiving such service;]”
4. By referring to the above provisions, the learned advocate submits that it is recipient of such services, which is liable to pay service tax in terms of the above rule. He submits that though the above submission was raised before Commissioner (Appeals), he has not dealt with the same learned advocate fairly agrees that the said legal issue could not be raised before the adjudicating authority as no reply was filed by them.
5. Learned DR for the revenue draws our attention to the Board’s Circular No. 96/7/2007-S.T., dated 23-8-2007 which stands reproduced in the impugned order by the Commissioner (Appeals) as under :-
