(2012) 25 STR 242 (Tri.-Del.) — C. M. Goenka & Co. v. Commissioner of Central Excise, Jaipur-I

Facts:
The appellant was a sub-broker. Prior to April 2005 in all the transactions through sub-broker, sub-broker used to issue bill to the client for their brokerage, stockbrokers used to bill the sub-brokers and as such the brokerage was being charged by both stockbroker as well as sub-broker in their respective bills and both were making separate payment of service tax. Since April 2005, in all the transactions in respect of purchase and sale of securities, it is the main broker who issues the transaction note and charges brokerage, a part of which is shared by him with the sub-broker.

Held:
The appellant was treated as a broker for the period post 2005. The service provided by him is the service of sub-broker of the stockbroker in connection with sale or purchase of securities listed in the stock exchange for their clients and during the period of dispute, it is the main broker who was issuing the transaction note and was receiving the commission from clients, a part of which was received by the appellant i.e., the subbroker. The question therefore related to whether or not the part of brokerage received by the appellant as sub-broker would attract service tax as it could not be held business auxiliary service as the service provided related to sale or purchase of stock. However, according to the Tribunal, this had to be decided in the light of the Larger Bench of Tribunal’s decision in case of Vijay Sharma & Co. v. CCE, Chandigarh (2010) 20 STR 309 (Tri.- LB) after ascertaining whether the main broker had paid service tax on the amount paid to the appellant. Since this judgment was not discussed in the order appealed against, the matter was remanded to the Commissioner (Appeals) for de novo decision in the light of judgment in the case of Vijay Sharma & Co. (supra).