2017 (3) TMI 1295 - AT - Service Tax

Marketing Services - the assessee-Appellants had multi facet business activities. When the imported crude oil was sold in the high sea, then there was a transaction of buyer and seller. When the assessee-Appellants got cleared the goods at the port, then they acted as C&F agent. So whatever charges were there, they were collected from the importer and paid tax thereupon - The Department is of the view that the assessee-Appellants had collected the charges for marketing services by raising debit notes and were not paying the Service Tax thereupon - Held that - In addition to clearing and forwarding charges, the assessee-Appellants had further collected the payment from various clients to promote their products, this amount is nothing but is the receipt from various clients to promote their products. When the assessee-Appellants had no relationship with the imported goods, then the services provided by them were nothing else but marketing services. When it is so, then we find no reason to interfere with the impugned order - appeal dismissed - decided against appellant-assessee.

Summary

Issues:
- Appeal against order-in-appeal nos. IND-I/136/2010 and IND-I/137/2010 dated 30.04.2010 passed by the Commissioner (Appeals) Central Excise, New Delhi.

Analysis:
1. Facts and Background:
The case involved the assessee-Appellants engaged in the manufacture and trading of edible oil, registered under "Business Auxiliary Service." The Department alleged that the assessee-Appellants collected charges for "marketing services" through debit notes but did not pay the corresponding Service Tax. The appeals were filed against this demand.

2. Arguments by Appellant:
Ms. Priyanka Goel, counsel for the assessee-Appellants, argued that the transactions were sales of goods, not services subject to Service Tax. She contended that the assessee-Appellants were not providing marketing services to others but were selling goods on a principal-to-principal basis. The counsel also challenged the basis of the Department's demand, citing legal precedents.

3. Arguments by Department:
Dr. Neha Garg, representing the Department, supported the demand, stating that the assessee-Appellants engaged in importing and trading edible oil, also promoting marketing strategies for products not owned by them.

4. Judgment and Analysis:
The Tribunal noted the diverse business activities of the assessee-Appellants, acting as sellers in high sea sales and as C&F agents. It was observed that the assessee-Appellants collected additional charges beyond C&F agent fees for various purposes, including promoting clients' products. The Tribunal found that these additional charges constituted marketing services, even though the assessee-Appellants had no direct relationship with the imported goods. Consequently, the impugned order demanding Service Tax on marketing services was upheld, dismissing the appeals.

5. Conclusion:
The Tribunal dismissed the appeals, affirming the demand for Service Tax on the marketing services provided by the assessee-Appellants. The decision was pronounced on 14.02.2017 by the Appellate Tribunal CESTAT NEW DELHI, with detailed reasoning provided in the judgment.