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TMI Blog2008 (12) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... 09-ST - Dated:- 31-12-2008 - Mr. M. Veeraiyan, Member (Technical) and Mr. P.K. Das, Member (Judicial) M/s. H.K. Associates Versus Commissioner of Central Excise Chandigarh Commissioner of Central Excise Chandigarh Versus M/s. Kandhari Beverages Pvt Ltd (KBPL) Commissioner of Central Excise Chandigarh Versus Shri Jaspal Singh Kandhari, Director Commissioner of Central Excise Chandigarh Versus Shri Harmeet Singh Kandhari, Partner Mr. J.P. Kaushik, Advocate for the Appellants. Mr. V.Kumar, DR for the Respondent. [Order per: M. Veeraiyan, Member (Technical)] (for the Bench):- 1.1 Appeal No.ST/85 of 2007 is filed by M/s. H.K. Associates challenging demand of service tax amounting to Rs.60,10,26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd it was noticed that the amount of commission paid to M/s. H.K. Associates was recorded under the head 'advertisement and sale promotion expenses'. Initial statements of officials of the KBPL indicated that the said payments were towards advertisement undertaken by M/s. H.K. Associates on behalf of KBPL. (c) Two show cause notices, one dated 13.10.04 and another dated 20.10.05 were issued to KBPL and H.K. Associates, Director of KBPL and a partner of M/s. H.K. Associates, proposing demand of duty from M/s. H.K. Associates and proposing imposition of penalty on all the four parties. (d) Commissioner confirmed the demand of service tax as proposed in the show cause notice from M/s. H.K. Associates and imposed a combined penalty under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sult in increased payment of commission to M/s. H.K. Associates. (c) The agreement and the balance sheet are contemporaneous documents. The initial statements of individuals which are contrary to these documents should be ignored. In this context, he submits that Shri Maneej Gupta was not aware of the nature of transactions as he was appointed only in August, 2003. (d) M/s. H.K. Associates have also received the above amount as commission and accounted the same as commission in their books of accounts and balance sheets. Merely because a portion of the sum was spent on advertisement by H.K. Associates, the entire amount of about Rs.9 crores received from KBPL cannot be treated as representing payment for rendering advertisement service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om both the sides. At the outset, we find that the Commissioner has concluded that because the agreement dated 1.4.03 was not disclosed by Maneej Gupta of M/s. H.K. Associates in his statement would mean that the agreement was prepared later, and is anti-dated. In fact, we find from the statement of Maneej Gupta, agreement dated 3.5.99 has been disclosed by him. The learned advocate claims that the agreement dated 1.4.03 is an amended version of the agreement dated 3.5.95, as it restricted the area to Punjab and Haryana only and the commission was enhanced to 3%. Further, the amounts in pursuance to these agreements are admittedly paid by KBPL to M/s. H.K. Associates over the years. These amounts have been admittedly reflected in the bal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssociates have conceived, designed, prepared the advertisements in question. 7.2. The amounts paid to M/s. H.K. Associates have been accounted under the category of advertisement and sales promotion expenses by KBPL. A portion of the sum so received was spent on advertisement by H.K. Associates. These facts alone can not lead to an inference that M/s. H.K. Associates have rendered the services as advertising agency and the entire amount of about Rs.9 crores received from KBPL has to be treated as representing payment for rendering advertising services. 7.3. We have also perused the notes given in the balance sheets of KBPL. For example, in the balance sheet for the year 1999-2000, a sum of Rs.4,88,23,638/- is accounted as adve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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