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TMI Blog2015 (12) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent Assessee had actually taken over the distillery unit of M/s. KSM. It undertook the manufacturing activity as well as sale of products. There was no evidence on record to show that the Assessee had received any amount from M/s. KSM for providing any service in relation to the business. It is the conducting agreement which has been referred extensively. Its clauses have been read together and harmoniously to conclude that the arrangement or deal in the present case is of such nature that M/s. KSM's distillery unit is taken over for conducting and managing by the Assessee. The Assessee is therefore responsible for any profits being generated or losses sustained. The nature of the transaction therefore would not fall within the meani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lhapur Sugar Mills Ltd. (for short 'M/s. KSM') for manufacturing and sale of liquor in the name of M/s. KSM. The plant and machinery is owned by M/s. KSM, who allowed to use the entire infrastructure by the Respondent for a consideration of ₹ 30 lacs per annum. The Respondent conducted entire business of manufacture of liquor, its sale and even effected the recovery of the sale proceeds in the name of M/s. KSM. The books of account were maintained in the name of M/s. KSM and sale proceeds were also credited to the account of M/s. KSM. At the end of each financial year, after settlement of accounts, the balance in Profit and Loss Account was paid by M/s. KSM to the Respondent after retaining an amount of ₹ 30 lacs being t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred above. It confirmed the demand along with interest and penalties were also imposed. Annexure 'D' is the copy of this order-in-original. 7) Aggrieved and dissatisfied with this order, the Assessee preferred an Appeal raising several grounds. It urged that the activity of managing the business is not taxable under the above category. That only services provided by the provider to a client will fall in 'business support service', where the principal activity is undertaken by the client. M/s. KSM was not performing any activity and the services provided by the Assessee, therefore, would not be taxable. The nature of the arrangement, therefore, cannot be termed as a service and in any event, falling under the above ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, telemarketing, processing of purchase orders and fulfillment services, information and tracking of delivery schedules. Pertinently Mr.Mishra would rely upon the words managing distribution and logistics, operational or administrative assistance in any manner and infrastructural support services . He would rely upon the explanation below this clause (104C) of section 65. Mr. Mishra would submit that the nomenclature of conducting agreement assigned to the transaction or deal in question is not decisive or conclusive. In the garb of the same, these support services have been provided and therefore, the service tax was payable. He would submit that the order-inoriginal therefore should not have been interfered with. The finding and conclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the clause. He would submit that the finding of fact is based on the materials produced. The Tribunal has concluded that there is no evidence that the Assessee received any sum from M/s. KSM. Hence, he would support the order of the Tribunal. 11) The Tribunal had before it the Appeal of the Respondent Assessee. That was directed against the order-inoriginal. The order-in-original proceeds on the footing that the Assessee's contention that it had not provided any service to M/s.KSM has no merit. The Assessee conveniently ignores the fact that the entire business i.e. purchase and sale were to be made in the name of M/s. KSM. M/s. KSM was doing work of accounting and the entire sale proceeds were initially credited in the account of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om M/s. KSM for providing any service in relation to the business. 14) It is in that light and in facts peculiar to the case of the present Assessee that the Tribunal concluded that clause (104c) of the substantive provision, namely, section 65 will not be attracted and is not applicable. In addition to this reason, the Tribunal concluded that on the same agreement for the same period, the Revenue directed M/s. KSM to pay service tax under the category of franchise service. M/s. KSM is paying service tax under the category franchise service regularly and this fact is not in dispute. It is in these circumstances that the Tribunal set aside the order-in-original. 15) Upon a reading of the Tribunal's order, we find that the same is e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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