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2018 (2) TMI 843 - AT - Service TaxBusiness Auxiliary Service - appellant entered into one such agreement with IGL for giving facility of selling CNG through their outlets; accounting and selling of the said CNG - Revenue entertained view that the considerations received by the appellant from IGL are in the nature of commission for rendering Business Auxiliary Service in terms of Section 65(19) of the Finance Act, 1994. Held that - similar set of facts has been a subject matter of decisions of this Tribunal in the case of Indian Oil Corporation Versus CST, Delhi-II 2017 (12) TMI 20 - CESTAT NEW DELHI , where it was held that service tax cannot be demanded under the category of Business Auxiliary Service as the gas has been sold by IGL to IOCL on principal to principal basis. The transaction between IGL and the appellant are on principal to principal basis. The appellant has been prohibited from holding himself as an agent of IGL. The agreement categorically states that the same is on principal to principal basis. The service tax liability under BAS cannot be sustained against the appellant - appeal allowed - decided in favor of appellant.
Issues:
Service tax liability under the category of "Business Auxiliary Service" for the appellant. Analysis: The appellant, a Government-owned PSU, entered into an agreement with a company for selling Compressed Natural Gas (CNG) through their outlets. The Revenue considered the consideration received by the appellant as commission for promoting the business of the company, leading to the initiation of proceedings for service tax liability. The appellant argued that the amount in question was a discount on the price of gas, not subject to service tax. They contended that the transactions were on a principal-to-principal basis, citing previous Tribunal decisions in similar cases. The Revenue argued that the CNG supplied by the company remained their property, and the sale was conducted by the company through the appellant, not directly to retail customers. The Tribunal examined the agreement between the parties and noted that similar cases had been decided in favor of appellants in previous judgments. The Tribunal highlighted that the transactions were on a principal-to-principal basis, as explicitly stated in the agreement. Relying on precedents, the Tribunal concluded that the service tax liability under Business Auxiliary Service could not be upheld against the appellant. The Tribunal emphasized that the appellant was not acting as an agent of the company and that all transactions were conducted on a principal-to-principal basis. In light of the above analysis and following the precedents set in previous cases, the Tribunal set aside the impugned orders, thereby allowing the appeals of the appellant. The judgment was pronounced on 12.02.2018 by the Tribunal at CESTAT New Delhi, with Hon'ble Mr. Justice (Dr.) Satish Chandra and Hon'ble Mr. B. Ravichandran presiding over the case.
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