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2015 (5) TMI 66 - AT - Service TaxDemand of service tax - amount received towards cost of the packing materials - Business Auxiliary Service - Held that:- Appellant is undertaking two functions - one as a sole selling agent promoting the sale of the country liquor manufactured for which he receives incentives @ ₹ 5/- per box on which service tax liability is discharged. The second transaction which the appellant undertakes is procuring raw materials and packing materials for the country liquor manufacturer on which he has discharged VAT liability; thereafter, he has sold these packing materials and raw materials to the country liquor manufacturer on a profit, again discharging VAT liability on the sale price. We have perused both the purchase invoices and also the sale invoices in respect of these transactions and these documents clearly shows payment of VAT /sales tax. Thus, the profit earned is in respect of a trading transaction in respect of packing materials and raw materials and has nothing to do with the activity of sole selling agent. In fact, these two transactions could have been performed by two separate entities. Merely because one entity has performed both transactions, the distinct and different nature of the transactions does not get obliterated. Therefore, the profit earned in purchase/sale transactions cannot be subject to service tax in respect of a service rendered as a sole selling agent for the goods manufactured by the liquor manufacturer. - impugned demands are clearly unsustainable in law - Decided in favour of assessee.
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