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TMI Blog2015 (9) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... t be any dispute that the appellants are in receipt of commission/facilitation for the sales which were derived on the basis of purchase made by the distributors appointed by the appellant and further down line. Though it is a fact that there is a cap for payment to the appellant as a distributor, it cannot be denied that the arrangement is nothing but multilevel marketing scheme. At this juncture we have to hold that the issue involved in this case is now squarely covered by the Judgement of this Tribunal in the case of Shri Surendra Singh Rathore and Smt. Chandra Bohra (2013 (8) TMI 149 - CESTAT NEW DELHI). - Tribunal in the case of Shri Surendra Singh Rathore and Smt Chanda Bohra upheld the penalties imposed on the appellant therein on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereof and for imposition of penalties. All the show-cause notices were contested on merits as well as on limitation. Adjudicating authority after following due process of law, confirmed the demands raised with interest and also imposed penalties. Aggrieved by such an order, appellants preferred appeals before the first appellate authority. The first appellate authority after granting personal hearing to the appellants rejected the appeals. 3. Learned Counsel appearing on behalf of appellants would draw our attention to the facts of the case as also the agreement entered by appellants with M/s. RMP. It is his submission that appellants cannot be considered as commission agents as it does not place on record any evidence to show that M/s RM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e would distinguish the cases, it is his submission that in the cases in hand M/s RMP are direct selling marketing company of various entities like Tata-AIG, Reliance Infocom and Whirlpool etc. The business transactions between appellants and M/s RMP are in respect of purchase of goods for further sale which cannot be covered under the category of business auxiliary services. He would extensively submit that the Judgements of the Tribunal in the cases as cited above are distinguishable on the facts. It is his submission that the penalties imposed on the appellants also are incorrect and needs to be set aside as the appellant had bonafide impression that they are not liable to pay service tax liability. 4. Learned D.R. on the other hand aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled so). The appellants and the chain of distributors appointed by them are under compulsion to purchase other goods worth ₹ 10,000/- from M/s. RMP. Appellants herein are getting paid an amount as commission from goods which were purchased by the distributors and sub-distributors appointed by the appellant distributors. 6.1 On this factual matrix we find that there cannot be any dispute that the appellants are in receipt of commission/facilitation for the sales which were derived on the basis of purchase made by the distributors appointed by the appellant and further down line. Though it is a fact that there is a cap for payment to the appellant as a distributor, it cannot be denied that the arrangement is nothing but multilevel mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oducing new customers, after such distributor propagates/promotes FSL products under "share your views with your friends and relatives concept." Thereafter, when a new customer starts using FSL products they in turn will propagate/promote FSL products to other persons and the distributor gets commission in respect of purchases made by such introducees, down the line. He shares the commission with others on such purchases. Consequently FSL sales are boosted. 5. The question is whether the commission received by the appellants as a consequence of the "RCM Business Marketing Scheme" in relation to discounts offered, constitutes consideration paid by the service receiver FSL to the service provider/appellants. 6. Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Service Scheme. The consideration/commission received by the appellants from FSL (this fact is not disputed) is the result of the marketing/promotion of FSL products by the appellants and constitutes a service (Business Auxiliary Service), provided in respect of FSL products to FSL. The commission/consideration is provided according to the terms and conditions, for marketing/promotion efforts by the appellants. The receipt of commission by the appellants clearly makes them providers of "Business Auxiliary Service" as defined under Section 65 (19) of the Act. The appellate and adjudication orders are impeccable on this analysis and warrant no interference." It can be seen from the above reproduced paragraphs of the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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