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TMI Blog2017 (2) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... riod after examining the applicability of the small scale industry - there was bonafide belief in the industry itself, imposition of penalty u/s 78 would not be justified - appeal partly allowed - part matter on remand. - ST/59740/2013-CU(SM) - A/50438/2017-SM[BD] - Dated:- 10-1-2017 - Shri V. Padmanabhan, Member (Technical) Shri B.S. Yadav, Advocate for the Applicants Shri R.K. Mishra, DR for the Respondent Per V. Padmanabhan: The appeal is filed against the order in appeal dated 17.10.2011 passed by the Commissioner (A) New Delhi. 2. The appellant is engaged in the activity of multi level marketing and was working as a distributor / marketing agent of M/s. Forever Living Imports (India) Pvt. Ltd. and was getting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s commission on purchases made by C , 'D' and E . It is alternatively contented on behalf of the appellants that the so-called commission paid by M/s. Forever Living Imports (India) Pvt. Ltd. to the appellant in respect of purchases made by subsequent distributors 'C', 'D' and 'E' does not amount to commissions for promotion or marketing activities permitted by the petitioner but is dividend paid to 'A' for his efforts for introducing the scheme to new introduces who also become distributors of M/s. Forever Living Imports (India) Pvt. Ltd. 5. After hearing both the sides, duly represented by Shri B.S. Yadav, Advocate for the Applicants and Shri R.K. Mishra, DR for the Respondent, we find that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upheld. 9. Both sides agree that the issue stands covered by the Tribunal's decision in the case referred to above. In the above decision, the demand of service tax under Business Auxiliary Service stands confirmed and it is held that service tax will be chargeable on the commission received by the distributor (such as the appellant ) on the products purchased by his sales group. However, it has been held that the service tax is not leviable on the commission earned by the distributor on the basis of the volume of the purchases made by the group of second level of distributors appointed by M/s. Forever Living Imports (India) Pvt. Ltd. on being sponsored by the distributor. 10. The demand also has been restricted to the normal ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on her part with an intention to evade demand of service tax. 11. Thus, we remand the matter to the lower authorities for re-quantification of the demand falling within the limitation period after examining the applicability of the small scale industry notification number 08/2008. 12. As regards penalty, we agree with Ld. Advocate that section 78 penalty is invokable when there is fraud with an intention to avoid payment of duty. As we have also observed that there was bonafide belief in the industry itself, imposition of penalty under the said section would not be justified. Accordingly, by confirming the demand against the appellant, we set aside the penalty imposed upon her. Her appeal is allowed accordingly. 13. The appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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