2018 (9) TMI 577 - AT - Service Tax

Business Auxiliary Service - appellant acts as a distributor and receiving commission from his client - benefit of cum-tax - Held that - Since, there is clear provision under Sub-Section(2) of Section 67 whatever amount was received as service charges it is to be treated as inclusive of service Tax, hence cum- Tax benefit is available to the appellant - benefit of cum-tax extended - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Applicability of Cum-Tax benefit under Sub-Section(2) of Section 67 of the Finance Act, 1994 to an appellant engaged in providing Taxable Services as a distributor receiving commission.
- Interpretation of relevant case laws to determine the availability of Cum-Tax benefit.
- Adjudication of the demand of Service Tax and the decision to uphold the Service Tax by the lower authority.

The judgment by the Appellate Tribunal CESTAT AHMEDABAD involved a case where the appellant, engaged in providing Taxable Services as a distributor receiving commission, contested the denial of Cum-Tax benefit by the lower authority. The appellant argued that the gross value received as a commission should be considered inclusive of Service Tax, entitling them to the Cum-Tax benefit under Sub-Section(2) of Section 67 of the Finance Act, 1994. The appellant relied on precedents such as the case of Godfrey Phillips India Ltd and Commr. Of C. Ex. & CUS., Patna to support their claim. The Revenue, represented by Ld. Superintendent (AR), supported the findings of the impugned order.

Upon review of the submissions, the Tribunal acknowledged the clear provision under Sub-Section(2) of Section 67, stating that any amount received as service charges should be treated as inclusive of Service Tax, thereby making the Cum-Tax benefit available to the appellant. The Tribunal cited the case of Godfrey Phillips India Ltd, emphasizing the extension of Cum-Tax benefit based on the Hon’ble Supreme Court judgment in the case of Advantage Media Consultant. The Tribunal modified the impugned order, allowing the appeal and granting the appellant the Cum-Tax benefit they were entitled to.

In conclusion, the Appellate Tribunal CESTAT AHMEDABAD ruled in favor of the appellant, holding that they were entitled to the Cum-Tax benefit under Sub-Section(2) of Section 67 of the Finance Act, 1994. The judgment highlighted the importance of interpreting relevant case laws to determine the applicability of Cum-Tax benefit in cases involving the receipt of service charges by distributors providing Taxable Services.