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2021 (5) TMI 159 - HC - Service TaxValidity of confirming demand of service tax - discount received from the manufacturers by way of credit notes - principal to principal relationship or not - Adjudicating authority did not follow the decisions of Tribunal since the revenue appeal is pending before the Apex Court - HELD THAT:- A perusal of definition of “service” would indicate that there must be (i) service provider, (ii) service recipient and (iii) consideration for providing a service. The aforesaid definition also clearly exempts the activity of transfer of title in goods by way of sale - A mere reading of the dealership agreement entered into between the assessee on the one hand and the manufacturers on the other would indicate that the petitioner purchases the goods from the manufacturers by way of sale - Even though the document may be styled as a dealership agreement and the petitioner may have to be conform to certain business standards, if read as a whole, one can come to the safe conclusion that the relationship between the parties was one of seller and buyer on principal to principal basis. Analysis of the documents referred to in the adjudication order to be done - HELD THAT:- The adjudicating authority has not read the document as a whole but instead gave undue emphasis to certain individual clauses occurring in the agreement - the finding of the authority that the relationship between the parties is not on principal to principal basis is clearly unreasonable. All the decisions were actually brought to the notice of the adjudicating authority. The adjudicating authority has chosen to disregard them on the ground that the revenue has filed appeal before the Supreme Court questioning some of the decisions. It is admitted that no interim order has been granted by the Supreme Court. It is well settled that merely because a matter is pending before the higher forum, such pendency will not take away the precedential value of the appealed decision. The adjudicating authority ought to have followed the Tribunal decisions which clearly support the stand of the petitioner. The aforesaid Tribunal decisions were binding on the authority. Petition allowed.
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