2018 (9) TMI 753 - AT - Service Tax

Business Auxiliary Service - Commission received for affecting sale and purchase of goods on behalf of M/s. RMP Revenue - Held that - This Tribunal in similar circumstances held that the amount paid to the distributor by M/s. RMP Infotech Pvt. Ltd. being a Commission and accordingly leviable to service tax under the category of Business Auxiliary Service - appeal dismissed - decided against appellant.

Summary

Issues:
1. Interpretation of Business Auxiliary Service for levy of service tax.
2. Applicability of precedent judgments in similar circumstances.
3. Validity of appeal based on pending case before the Delhi High Court.

Analysis:
1. The case involved an appeal against the demand for service tax on commission received by the appellant for sale and purchase of goods as a distributor. The revenue sought to collect service tax under the category of Business Auxiliary Service as per the Finance Act, 1994. The appellant received a show cause notice for non-payment of service tax amounting to ?1,88,888/- for the period April 2010 to March 2012. The Commissioner (Appeals) reduced the demand by granting cum-tax benefit and dropping the penalty under Section 76 of the Finance Act. The appellant challenged this decision, leading to the present appeal.

2. The appellant argued that the issue was covered by a previous judgment in Lalit Dongre Vs. Commissioner of Central Excise, Nashik, which was against the appellant. However, the appellant highlighted that an appeal against the basis of that judgment was pending before the Delhi High Court. The Revenue, represented by the Assistant Commissioner, supported the findings of the Commissioner (Appeals) and emphasized that the mere pendency of an appeal against a tribunal judgment should not delay the resolution of the matter. The Revenue pointed out that in Lalit Dongre's case, the tribunal had ruled against the appellant, who was acting as a direct independent distributor for a company.

3. The Tribunal examined the precedents and observed that in similar circumstances, payments made to distributors by the company in question were considered as commission, making them liable for service tax under the category of Business Auxiliary Service. Relying on this precedent, the Tribunal dismissed the appeal, upholding the impugned order. The judgment was delivered by Dr. D.M. Misra, Member (Judicial), and Mr. Sanjiv Srivastava, Member (Technical).

This comprehensive analysis covers the interpretation of Business Auxiliary Service for service tax levy, the relevance of precedent judgments, and the validity of the appeal based on a pending case before the Delhi High Court.