2018 (11) TMI 1521 - AT - Service Tax

Business Auxiliary Service - amount received as commission for sale of Indian Made Foreign Liquor (IMFL) during the period 01.07.2003 to 30.06.2004 - Held that - The agreement entered into do not indicate that the respondent shall be paid the amount as commission which is based on the quantum of sale or purchase. The first appellate authority has correctly come to the conclusion that the respondent is covered under the notification No. 13/2003-ST, dated 20.06.2003 for the period in question and no tax liability arises - impugned order upheld - appeal dismissed - decided against appellant-Revenue.

Summary

Issues:
Whether the respondent is liable to discharge service tax liability under the category of 'Business Auxiliary Service' for the commission received for the sale of Indian Made Foreign Liquor (IMFL) during a specific period.

Analysis:
The appeal was filed by the Revenue against an Order-in-Appeal, questioning the service tax liability of the respondent under 'Business Auxiliary Service' for the commission received for selling IMFL. The investigating authorities contended that the respondent acted as a sales promotion agent, not eligible for the benefits of being a Commission Agent. The adjudicating authority upheld the demands, penalties, and interest. However, the first appellate authority overturned the decision, stating that the respondent received consideration as a Commission Agent.

The Commissioner argued that the respondent was a Sales Promotion Agent for IMFL manufacturers, taxable under 'Business Auxiliary Service,' not as a Commission Agent. The Commissioner highlighted the agreement between the respondent and the manufacturers, emphasizing the promotional activities performed by the respondent. On the other hand, the Counsel cited Tribunal judgments like Chahabria Marketing Limited vs. CST, Mumbai, Brindco Sales Ltd. vs. CST, Delhi, and Premier Enterprises vs. CCE, Hyderabad, to support the respondent's position.

The Tribunal examined the agreement clauses and the definition of 'Commission Agent' as per Notification No. 13/2003-ST. It was noted that the respondent was to be paid a commission based on the sales or purchase quantum, aligning with the notification. The Tribunal agreed with the first appellate authority's decision, ruling that the respondent fell under the notification, hence no tax liability existed. The Tribunal found the cited judgments applicable and favoring the respondent, concluding that the impugned order was legally sound and did not warrant any intervention.

In the end, the appeal was rejected by the Tribunal, affirming the correctness and legality of the decision.