2024 (12) TMI 1023 - AT - Service Tax

Levy of service tax - Business Auxiliary Service - early payment incentive/ discount earned by the appellant in the capacity of del-credere agent of M/s Reliance Industries Limited - HELD THAT - The very same issue in the appellant s own case only for the different period has been decided by this Tribunal in RUBEXCO PVT LTD. VERSUS COMMISSIONER OF C.E. S.T. -VADODARA-I 2024 (7) TMI 1570 - CESTAT AHMEDABAD where it was held that 'This issue is no longer res-integra as in respect of identically placed delcredere agent in the case of M/S. TRADEX POLYMERS PVT LTD VERSUS COMMISSIONER OF SERVICE TAX, AHMEDABAD 2011 (12) TMI 398 - CESTAT, AHMEDABAD this Tribunal has held that 'The discounts/incentives received by the assessee from the print media will not be liable for service tax under the category of advertising agency services.' The issue is no longer res-integra. Accordingly, following the above Tribunal s decision in the appellant s own case, the impugned order is set aside - Appeal is allowed.

Summary

Issues: Whether early payment incentive/discount earned by the appellant as a del-credere agent is chargeable to service tax under Business Auxiliary Service.

Analysis:
The judgment revolves around the issue of whether the early payment incentive/discount earned by the appellant, acting as a del-credere agent of a company, is subject to service tax under Business Auxiliary Service. The appellant argued that a similar issue had been decided in their favor in previous cases and cited relevant judgments to support their stance. The Revenue, represented by the Authorized Representative, maintained the findings of the impugned order.

The Tribunal examined the submissions from both sides and reviewed the records. It was noted that a previous order by the Tribunal had addressed the same issue for a different period in the appellant's case. The Tribunal reiterated that the discount earned by the appellant as a del-credere agent was essentially a trade discount and not subject to service tax under Business Auxiliary Service. The Tribunal cited precedents involving similar scenarios where it was established that early payment incentives or discounts were not liable for service tax under the category of Business Auxiliary Service. The Tribunal emphasized that such incentives were akin to discounts and not charges for services, thereby exempting them from service tax liability.

Based on the established legal principles and precedents, the Tribunal concluded that the impugned order was not sustainable. Consequently, the Tribunal set aside the impugned orders and allowed the appeals in favor of the appellant. The decision was in line with previous judgments and established principles, rendering the issue no longer res-integra. Therefore, following the Tribunal's consistent decisions in the appellant's own case and other relevant judgments, the appeal was allowed, and the impugned order was set aside.