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TMI Blog2016 (2) TMI 610X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. - Service Tax COD Application No. 54241 And 55415 of 2014 with Stay Application No. 54240 And 55414 of 2014, Appeal No. 53789 And 54708 of 2014 - - - Dated:- 17-12-2015 - Anil Choudhary, Member (J) And B. Ravichandran, Member (T) For the Appellant : Shri Vineet Kumar Singh, Adv For the Respondent : Shri D K Sinha, AR (DR) ORDER Per Anil Choudhary The appellants herein are the business associates of Amway India Enterprises Pvt. Ltd. (Amway for short), as business associates of Amway they earned both discount and commission. The appellants are in appeal against order-in-appeal passed by the Commissioner (Appeals), wherein the demand of service tax is confirmed both on the discount and commission. 2. The learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . According to the Department, the activity of the assessees is promotion or marketing or sale of the goods produced or provided by or belonging to the client. In our view, the activity which is covered under Section 19(i) is in relation to the promotion or marketing or sale of the goods produced by the client or provided by the client or belonging to the client. This expression, in our view, would not cover the sale of the goods by a person, which belong to him, as the activity of the promotion or marketing or sale of the goods by a person belonging to him would not constitute service. The assessees in these cases are distributors, who purchase the goods from Amway at the Distributors Acquisition Price (DAP)) and sell the same in retail at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being sponsored by that Distributor are appointed by Amway as second level of distributors is, in our view, the activity of marketing or sale of the goods belonging to Amway and the commission received by the Distributor from Amway, which is linked to the performance of his sales group (group of the second level of distributors appointed on being sponsored by the Distributor) would have to be treated as consideration for Business Auxiliary Service of sales promotion provided to Amway. Therefore, service tax would be chargeable on the commission received by a Distributor from Amway on the products purchased by his sales group. However, in the impugned orders service tax has been demanded on the gross amount of commission and no distinction h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity, he has to be treated as business or commercial concern. Therefore, notwithstanding the fact that w.e.f. 1.5.2006 the term, commercial concern in Section 65(105)(zzb) was replaced by any person, we are of the view that even during the period prior to 1.5.2006, the Business Auxiliary Service, even if provided by an individual to a client, was taxable. Moreover, in this group of appeals, the Appellants in Appeal No.ST/257/2011 and ST/259/2011 are proprietary firms who, without any doubt, are commercial concerns. 15. Another point of dispute is as to whether duty exemption under notification no.5/2006-ST would be admissible to the Distributors in this group of cases. In this regard, the Departments plea is that this exemption is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the jurisdictional service tax authorities nor did they file ST-3 Return and, therefore, they are guilty of suppression of relevant facts and deliberate violation of the provisions of Finance Act, 1994 and of the Rules made thereunder with intent to evade payment of tax. On considering the rival submissions on this point, we are of the view merely because the assesses did not apply for Service Tax Registration or did not file ST-3 Returns or did not declare their activities to the jurisdictional central excise authorities, it cannot be inferred that this was a wilful act with intent to evade payment of service tax. We also take notice of the fact that in respect of appeals filed by the Revenue, the Commissioner (Appeals) after analyzin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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