2019 (5) TMI 231 - AT - Service Tax

SSI Exemption - branded service - service of multi level marketing business - Benefit of N/N. 06/2005-ST dated 01/03/2005 - HELD THAT - The issue at hand is squarely covered by the decision of Charanjeet Singh Khanduja 2015 (6) TMI 585 - CESTAT NEW DELHI wherein it has been held that the benefit of Notification under 05/2006-ST would be admissible to the distributor engaged in promoting/ marketing of the product of Amway as they are not marketing or promoting any taxable service under a brand name. The appellant is entitled for the benefit of Notification No. 5/2006-ST as the exemption Notification is available to the noticee. The tax dues declared by the appellant under VCES is appropriate - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Confirmation of demand raised against the appellant in the impugned order.
2. Applicability of Service Tax Voluntary Compliance Encouragement Scheme, 2013 (VCES) to the appellant.
3. Correct declaration of 'tax dues' by the appellant.
4. Eligibility of the appellant for exemption under Notification No. 06/2005-ST.
5. Comparison with the decision in the case of M/s Charanjeet Singh Khanduja and Others.
6. Interpretation of Notification No. 5/2006-ST regarding duty exemption for distributors promoting branded products.
7. Final decision on the appellant's entitlement to the benefit of Notification No. 5/2006-ST.

Analysis:
1. The order challenges the Order-in-Original confirming the demand against the appellant based on a Show Cause Notice issued on 02/12/2014.
2. The appellant, registered with the Service Tax Department, filed a declaration under VCES for tax dues from April 2011 to December 2012, but the Department found discrepancies related to commission received from M/s Tulip Global Private Limited.
3. The appellant argued that they are engaged in 'multi level marketing' and not promoting branded services, thus eligible for SSI exemption under Notification No. 06/2005-ST, citing a relevant Tribunal decision.
4. The appellant contended that the impugned order is unsustainable, while the Revenue supported the grounds for confirming the demand.
5. The Tribunal found the issue covered by a previous decision regarding distributors promoting products, distinguishing between marketing branded products and providing branded services under a brand name.
6. The Tribunal concluded that the appellant is entitled to the benefit of Notification No. 5/2006-ST as they were not marketing or promoting any taxable service under a brand name, setting aside the impugned order.
7. Consequently, the impugned order was overturned, and the appeal was allowed, granting the appellant consequential benefit under the applicable exemption.

This detailed analysis covers the issues raised in the judgment, outlining the arguments presented by both sides and the Tribunal's reasoning leading to the final decision in favor of the appellant.