2018 (4) TMI 1674 - AT - Service Tax

Business Auxiliary Service - Receipt of commission - small service provider exemption upto ₹ 10 lakhs - brand name belongs to another person - time limitation - Held that - The extended period of limitation is not liable to Revenue in terms of the law laid down by this Tribunal in SHRI KRISHNA KUMAR KAUSHIK VERSUS C.C.E. &S. T., LUCKNOW 2015 (11) TMI 468 - CESTAT NEW DELHI where appeals can be remanded to the original adjudicating authority for deciding the matter in accordance with the judgement in the case of Mr. Charanjeet Singh Khanuja & Others Vs. CST, Indore & Others 2015 (6) TMI 585 - CESTAT NEW DELHI . The Adjudicating Authority is directed to rework of the demand for the normal period and to allow credit of the taxes already paid, the proof of which led by the appellant before him - appeal allowed by way of remand.

Summary

Issues:
1. Chargeability of service tax under Business Auxiliary Services for services rendered to M/s Amway India Enterprises.
2. Calculation of service tax liability, interest, and penalty.
3. Validity of show cause notices and credit for service tax payments.
4. Imposition of penalty under Section 76 of the Finance Act.
5. Application of limitation period for taxation.

Analysis:

1. The primary issue in this case pertains to the chargeability of service tax under Business Auxiliary Services for services provided to M/s Amway India Enterprises. The Commissioner (Appeals) based the decision on a previous Tribunal ruling, Final Order No. ST/A/52279 – 52280/2015 – CU(DB) dated 30 June, 2015. It was determined that service tax would be applicable on the commission received by a distributor from Amway on products purchased by his sales group or dealers/sub-dealers.

2. The calculation of the service tax liability was detailed in the order, with the net service tax liability amounting to ?34,155. Additionally, interest was confirmed, and a penalty of ?17,078 under Section 76 of the Finance Act was imposed. The appellant contested the penalty, highlighting the service tax payments made and the minimal outstanding amount.

3. The appellant raised concerns regarding the show cause notices issued, stating that two separate notices were issued for different periods. It was noted that the appellant had deposited a significant portion of the service tax amount, with only a small outstanding balance. The Tribunal acknowledged the payments made and set aside the penalty under Section 76 of the Finance Act.

4. Regarding the imposition of penalty under Section 76 of the Finance Act, the Tribunal considered the appellant's compliance with service tax payments and the minimal outstanding amount. In light of the circumstances and the payments made, the penalty was set aside.

5. The issue of limitation period was also addressed in the judgment. The Tribunal held that the extended period of limitation was not applicable to the Revenue based on the law established in the previous Tribunal ruling dated 30 June, 2015. The Adjudicating Authority was directed to rework the demand for the normal period, considering the taxes already paid by the appellant and adjusting any balance tax payable with applicable interest or refunds as per rules.