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TMI Blog2024 (3) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... oth the cases viz., HERO HONDA MOTORS LTD VERSUS COMMISSIONER OF SERVICE TAX, NEW DELHI [ 2012 (4) TMI 198 - CESTAT, NEW DELHI] and TATA MOTORS LIMITED VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI-II [ 2017 (5) TMI 462 - CESTAT MUMBAI] are inapplicable to the facts of the present case in as much as in those cases royalty fees was collected by the appellants therein which was considered by the Tribunal as Intellectual Property Service' which is not so in the case of present case where the service charges are clearly reflected in the relevant agreement as promotional fees in consideration of various promotional activities undertaken by the appellant. Whether the commission received from the foreign entities for sale of goods in domestic market is leviable to Service Tax? - HELD THAT:- It is covered by the judgment of the Larger Bench in the M/S. ARCELOR MITTAL STAINLESS (I) P. LTD (NOW KNOWN AS M/S. ARCELOR MITTAL DISTRIBUTION SOLUTIONS INDIA PRIVATE LIMITED) VERSUS COMMISSIONER SERVICE TAX MUMBAI-II [ 2023 (8) TMI 107 - CESTAT MUMBAI-LB] , hence the demand confirmed by the Commissioner cannot be sustained. Whether the demands issued to the appellant by Jamshedpur Commissionerate o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posing to demand Service Tax of Rs.67,35,810/- under the category of Management Consultants Service for the period from 2001-2002 to 2004-05 on account of royalty for use of their trade mark by various organisations. The second show-cause notice was issued by the Commissioner of Service Tax, Bangalore on 10.06.2008 referring to the same set of agreements alleging that the services rendered by the appellant fall under taxable category of Business Auxiliary Service proposed to recover Service Tax for the period from 09.07.2004 to 31.03.2006 for Rs.37,28,327/- and also for receiving commission from the overseas party amounting to Rs.32,21,160/- totalling to Rs.69,49,487/- with interest and penalty. The Commissioner, on adjudication, by order dated 31.10.2008 confirmed the demand with interest and penalty. Aggrieved by the said order, they filed an appeal before this Tribunal and on a remand in de novo adjudication, the learned Commissioner confirmed the duty with interest and penalty under Sections 76 and 77 of the Finance Act, 1994. 4. At the outset, the learned advocate for the appellant has submitted that two show-cause notices were issued one by the Jamshedpur Commissionerate and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her, he has submitted that the learned Commissioner has erred in confirming the demand on the commissions received by the appellant in convertible foreign exchange for sale of goods of the overseas buyers in domestic market. It is his contention that the issue of chargeability of Service Tax on commissions received from the overseas entities for sale of goods, is no more res integra covered by the Larger Bench decision of the Tribunal in the case of M/s. Arcelor Mittal Stainless Steel Ltd. vs. CCE, Mumbai: Interim Order No.26/2023 dated 9.6.2023. 5. Per contra, the learned Authorised Representative for the Revenue reiterating the findings of the learned Commissioner has submitted that on a close analysis of the agreements with M/s. Savitha Chemicals Ltd. dated 18.7.2001 and with M/s. Castrol India Ltd. dated 25.09.2001, it is clear that under the said agreements titled as Promotional Agreement , the appellant provided services to promote products of M/s. Savitha Chemicals Ltd. and M/s. Castrol India Ltd. for which they receive promotional fee from the said clients. The agreements do not disclose that the appellant had simply allowed to use their logo or trademark but carried out ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as an initial-fill for the new excavators manufactured by TELCON. For this purpose, if so desired by TELCON, CASTROL will build and maintain bulk storage and handling facilities at TELCON's works at Jamshedpur and / or Dharwad on such terms and conditions as may be agreed upon between the parties whilst finalizing the said arrangements. d) CASTROL will continue to market the said product through its entire distribution network as well as market the said product through the Authorised Customer Support Centers (ACSCs) of TELCON, as a service-fill for the excavators coming for servicing thereat, For the purpose, CASTROL will supply the said product in 205 Litre barrels, 50 litre and 20 Litre HDPE drums. CASTROL will modify the design of the drums to highlight the certification of the said product granted by TELCON. e) The agreement will also cover other lubricant/s of CASTROL which TELCON may test, certify and recommend for use in excavators manufactured by TELCON from time to time and for such future supplies the same terms and conditions, as are agreed to in this Agreement will be applicable. 2) PRICES a) For the initial-fill, CASTROL will supply the said product to TELCON as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h oil analysis and expert advisory service. f) CASTROL will organize training programmes and seminars for TELCON service personnel on hydraulic fluids and trouble-shooting 5) NON-EXCLUSIVITY It is understood that in the arrangement set out herein, there is no 'exclusivity inter se between the parties and TELCON would be free to certify similar products of other parties for use in its excavators and that such certification is recommendatory for the better operation and maintenance of the machine, but not mandatory 6) PAYMENT OF PROMOTIONAL FEE a) In consideration of the testing and certification of the said product by TELCON, for recommending the use of the said product for the excavators manufactured by TELCON, for using the said product for the initial-fill, for promoting the use of the said product by its ACSCs for service-fills and for the promotional activity aforementioned, CASTROL will pay to TELCON promotional fee on the following basis Market Promotion fees payable per litre Rs 6.00/- (Rupees Six only) b) The market Promotion Fees will be payable on total sales of the said product in the After Market ie sales of said product through CASTROL's own distribution networ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e it was alleged as Business Auxiliary Service . When the department is not sure about the category of taxable service under which activities undertaken by the appellant in providing services to the clients would fall, allegation of mis-statement, suppression of facts, cannot be sustained. Besides, we find that the Commissioner by invoking Section 80 in setting aside the penalty categorically held that the issue involved in the present case is a matter of interpretation of law with regard to classification and taxability of the service and further observed that the very fact that the same activity of the assessee has been proposed to be classifiable under two different categories of taxable services as per show-cause notice issued by different formations, it provides reasonable cause for non-payment of Service Tax and penal proceedings dropped. Therefore, invoking larger period of limitation in confirming the demand, in our opinion, cannot be sustained. In the result, the impugned order is modified and the demand is confirmed only for the normal period of limitation relating to Business Auxiliary Service. The matter is remanded to the adjudicating authority for computing demand for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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