2023 (4) TMI 770 - AT - Service Tax

Levy of Service Tax - Franchise service or not - providing the service of promotion and marketing and distribution of various products of BSNL for which they were receiving the commission - HELD THAT - The issue is no more res-intera in view of the judgement in the case of GOYAL AUTOMOBILES AND NAROTA RAM GOYAL SONS VERSUS COMMISSIONER OF CENTRAL EXCISE CHANDIGARH - II 2016 (2) TMI 725 - CESTAT NEW DELHI which was not challenged by the Revenue before the appellate authority. It was held in the said case that the commission paid to appellants is also included in the value on which tax has been collected from the customer. The customer is, consequently, the recipient of the full value of services from none other than M/s Bharat Sanchar Nigam Ltd; thus, it is no different from the other two products. BSNL has already deposited service tax on commission received by the appellant, which is clear from the certificate produced by them on record - appeal allowed.

Summary

Issues involved:
The appeal against the order rejecting appellant's appeal on service tax liability for commission received from BSNL.

Facts of the case:
The appellant, a franchisee of BSNL, received commission for promoting and distributing BSNL products without paying service tax. After a show cause notice, a demand was raised for service tax. The appellant appealed, but the Commissioner (Appeals) upheld the demand, leading to the present appeal.

Appellant's arguments:
The appellant argued that BSNL had already paid service tax on the full value inclusive of the commission. They presented a certificate from BSNL confirming this. They contended that double taxation on the commission was unjust, citing relevant Tribunal decisions supporting their position.

Department's arguments:
The Department maintained that the appellant was liable for service tax on the commission received from BSNL. They argued that previous Tribunal decisions cited by the appellant did not apply directly to the present case, emphasizing the specific issue of the appellant's liability for the commission.

Judgment and reasoning:
After considering both parties' submissions and relevant case law, the Tribunal found that the issue was settled by a previous decision not challenged by the Revenue. The Tribunal highlighted that BSNL had already paid service tax on the commission, as evidenced by the certificate provided. Following the precedent set in the previous case, the Tribunal allowed the appeal and set aside the impugned order.

Separate Judgment:
No separate judgment was delivered by the judges in this case.