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2016 (12) TMI 1062 - AT - Service TaxProviding multi level marketing (MLM) services to the principle - whether ‘Business Auxiliary Services’ or not? - Time limitation - Held that: - We find that the issue of multi level marketing falling under the category of ‘Business Auxiliary Services’ stands finally concluded by the Tribunal in the case of Charanjeet Singh Khanuja Vs. CST Indore [2015 (6) TMI 585 - CESTAT NEW DELHI]. However, in the same very decision, the Tribunal has observed that since there was bonafide belief in the industry itself and in as much as two views stands held by the department itself regarding taxability of activity, longer period of limitation would not be available to the Revenue. She submits that the entire demand against Shri Sunil Wadhwa would fall outside the normal period of limitation. However, demand against Mrs. Neela Wadhwa is within the limitation period. However, he submits that penalty imposed upon Mrs. Neela Wadhwa under section 78 of the Act may be set aside, in as much as there was no suppression on her part with an intention to evade demand of service tax. In view of the above we set aside the orders and allow the appeal of Shri Sunil Wadhwa on limitation. In respect of the appeal of Mrs. Neela Wadhwa, 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. 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 Mrs. Neela Wadhwa, we set aside the penalty imposed upon her. Her appeal is allowed accordingly. Appeal allowed by way of remand.
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