2014 (1) TMI 38 - AT - Service Tax

Waiver of pre-deposit of amount of service tax - Benefit of SSI exemption - Commission for the sale of the goods of products - Held that - appellant is receiving commission for the sale of products of Amway . On a specific query from the Bench, learned counsel submits that the benefit of Small Scale Notification No. 06/2005-S.T., dated 1-3-2005 talks about the taxable services under the brand name or trade name and does not talk about the services rendered towards the products. It is his submission that the commission received by them is for the sale of goods of Amway and the said goods cannot be considered as a taxable service - prima facie the said notification envisages denial of the benefit to taxable service to the brand name or trade name registered to the another person. In our considered view, the appellant has made out a case for the waiver of pre-deposit of amounts involved. Accordingly, the application for waiver of pre-deposit of amounts involved is allowed and recovery thereof stayed till disposal of appeal - Stay granted.

Summary

Issues:
Waiver of pre-deposit of service tax amount under Finance Act, 1994 on commission for sale of goods of 'Amway India' - Eligibility for Small Scale Notification No. 06/2005-S.T. benefit.

Analysis:
The judgment by the Appellate Tribunal CESTAT AHMEDABAD addressed the issue of a stay petition filed for the waiver of pre-deposit of service tax amount of Rs. 11,336/- along with interest and penalties under various sections of the Finance Act, 1994. The demand was made on the grounds that the appellant was not eligible for the benefit of Small Scale Notification No. 06/2005-S.T. concerning the commission received for the sale of products of 'Amway India'. The Tribunal heard both sides and examined the record, noting that the appellant was receiving commission for the sale of 'Amway' products. The appellant argued that the commission was for the sale of goods of 'Amway' and not for taxable services as per the notification. The Tribunal observed that the notification denies the benefit of taxable service to the brand name or trade name registered to another person. After considering the submissions, the Tribunal found that the appellant had made a case for the waiver of pre-deposit of the amounts involved. Consequently, the application for the waiver of pre-deposit was allowed, and the recovery was stayed pending the disposal of the appeal.

This judgment highlights the interpretation of Small Scale Notification No. 06/2005-S.T. in the context of commission received for the sale of goods. It underscores the distinction between taxable services under a brand name or trade name and services rendered towards the products themselves. The Tribunal's analysis focused on the nature of the commission received by the appellant for selling 'Amway' products and whether it falls under the purview of taxable services as per the notification. By examining the language and intent of the notification, the Tribunal concluded that the appellant's case warranted the waiver of pre-deposit of the service tax amount. The decision emphasizes the importance of a thorough understanding of the legal provisions and their application to specific factual scenarios in tax matters.