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TMI Blog2016 (12) TMI 230X X X X Extracts X X X X X X X X Extracts X X X X ..... hat DEL was a commission agent, seems to be erratic reading of the clauses of agreement and this itself does not amount DEL has been appointed as “commission agent”. The amount indicated on the invoice and recorded in the accounts as commission, in our view, will not attract tax under reverse charge mechanism. We also find strong force in the contentions raised by learned Counsel that in order to tax this account as a commission, there has to be necessarily three parties, seller, purchaser and a person who negotiates such transaction. From the records it is very clear that DEL had not negotiated purchase or sale on behalf of appellant or their customers; to our mind the deduction/commission is nothing but trade discount. In view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 to 09. Lower authorities after following due process of law held against appellant and confirmed the demands raised along with interest and also imposed penalties. For coming to such a conclusion, lower authorities relied upon the definition of the Commission Agent as indicated in the definition of Business Auxiliary Service . 3. Learned Counsel submits that lower authorities have erred in confirming the demands raised on them. He would draw our attention to the agreement entered by them with DEL and submits that the agreement specifically talks about sale of goods by appellant to DEL and DEL would get flat deduction/commission of 8% on the invoice value. He has drawn our attention to the fact that the invoices which are raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e revolves around the fact whether clearances effected by appellant on goods which exported by them to DEL is of actual sale or sale based on commission basis. If it is direct sale to DEL then appellant has case and if it is held that it is not direct sale, but the sale based on commission basis then appellant has no case. For this we have to examine the agreement dated 16.05.2001 entered between appellant and DEL. The agreement is enclosed to the appeal memorandum and on perusal of the same we find that the agreement sets out clauses about the sale of goods by appellant to DEL. The said agreement speaks of purchasing of various items from appellant by the said DEL and it also records that appellant shall allow flat deduction / commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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