Analjit Singh Vs Commissioner of Service Tax (CESTAT Delhi)
CESTAT Delhi held that granting “call option” is not an activity of rendering service. Thus, appellant has wrongly been held to have been a service provider while receiving “call option fee”.
Facts- The appellant is registered with Service Tax Commissionerate for rendering Management Consultant Services. Department had conducted audit of the appellant for the period 2007-08 to 2010-11 and it was observed that the appellant was having income in the form of “Call Option Fee” but has not paid service tax treating the said income non- taxable income.
Department formed an opinion that the said amount is received for rendering taxable service called “support service of business or commerce” as defined u/s. 65 (104c) and taxable u/s. 65 (105) (zzzq) of Finance Act, 1994. Rule 5 of service tax (Determination of Value) Rules, 2006 has also been invoked alleging that the amount received in the name of “Call Option Fee” has to be an amount includable in the taxable value. Accordingly, service tax amounting to Rs.12,94,09,931/- including education cess and higher education cess was demanded from the appellant alongwith proportionate interest and appropriate penalties. The said proposal has been confirmed vide the order under challenge. Being aggrieved the appellant is before this Tribunal.
