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2017 (7) TMI 1457 - AT - Service TaxLevy of service tax - business auxiliary service or not - distribution for recharge vouchers, electronic coupons and starter packs of M/s. VCL - Department was of the opinion that the income earned on resale of recharge vouchers and electronic coupons, starter packs is a discount or commission provided by M/s. VCL - HELD THAT:- The issue whether the sale and purchase of SIM cards, recharge coupons, starter packs would amount to business auxiliary service has been settled by the judgment in the case of THE COMMISSIONER OF CENTRAL EXCISE VERSUS M/S. BHARAT CELL [2015 (10) TMI 1111 - MADRAS HIGH COURT] wherein the ratio of the decision laid down in GR. MOVERS AND MARTEND FOOD AND DEHYDRATES PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, LUCKNOW [2013 (6) TMI 339 - CESTAT NEW DELHI] was referred. The other decisions of the honourable High Courts of Allahabad as well as Kerala have taken similar view. The demand also includes the amount reflected in the credit notes issued by M/s. VCL to appellant. The demand is also made on the margin earned by the appellant for outright purchase and sale of pepsico products. It is not disputed that the appellants in these appeals have discharged VAT on the products sold by them. Therefore, the Department cannot demand service tax basing upon the distribution agreement entered into with M/s. Pepsico Holdings (India) Pvt. Ltd. The judgment relied upon by the learned counsel for the appellant in the case of BHARAT PETROLEUM CORPN. LTD AND HINDUSTAN PETROLEUM CORPN. LTD VERSUS COMMISSIONER OF SERVICE TAX [2014 (7) TMI 159 - CESTAT MUMBAI] is squarely applicable to the said issue. The demand is unsustainable - The impugned orders are set aside - Appeal allowed.
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