9911796707
TMI Blog2015 (8) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... der Sections 75A, 76, 77 and 78 of the Finance Act 1994 were set aside. The impugned demand was confirmed under Business Auxiliary Service on the commission received from M/s Amway by the appellant by virtue of being a distributor of M/s Amway. 2. The appellant has contended that- (i) the demand pertains to the extended period and as there was no wilful misstatement or suppression of facts, the same is time-barred, (ii) it was not promoting any product, and therefore, is not covered under the scope of business auxiliary service as defined under Section 65 (19) of the Finance Act 1994. (iii) the commission received pertained to sale of goods. (iv) During the relevant period there was confusion even in the Revenue Department and in some case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ributors' Acquisition Price (DAP)) and sell the same in retail at price not exceeding MRP fixed by the Amway. This activity of the Distributors, in our view, cannot be treated as promotion, marketing or sale of the goods produced or provided by or belonging to the client (Amway), as the sale of the goods purchased by the Distributors from Amway is not the sale of the goods belonging to their client - Amway. Once the Amway products have been purchased by a Distributor from Amway, those products cease to belong to Amway, but belong to the Distributor and sale of these goods by the Distributor would not constitute service to Amway. For the same reason, any incentive or commission received by a Distributor from Amway for buying certain quan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een demanded on the gross amount of commission and no distinction has been made between the commission earned by a Distributor from Amway based on his own volume of purchase from Amway and the commission earned by him on the basis of the volume of purchases of Amway products made by his sales group i.e. group of second level of Distributors appointed by Amway on being sponsored by the Distributor. For quantifying the service tax demand on the commission received from Amway on the volume of purchase made by the distributors sponsored /enrolled by a particular distributor i.e. the Distributor's sales group, these matters would have to be remanded to the Original Adjudicating Authority. 14. Another objection raised by the appellants in ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... group of cases. In this regard, the Department's plea is that this exemption is not applicable when the taxable service is provided by a person under a brand name/trade name, whether registered or not, of another person and in this group of cases, the Distributors have promoted the sale/marketing of branded products. This plea of the Department is not correct, as in these cases the distributors are engaged in promoting sales/marketing of the products of Amway and they are not marketing or promoting any taxable service which is branded and the brand name belongs to another person. Marketing or sale promotion of branded products by a person/ commission agent does not amount to providing branded service by him and hence, marketing or sales ..... X X X X Extracts X X X X X X X X Extracts X X X X
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