TMI Blog2014 (12) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... ich has been offered as discount to the appellant by WSL on the transactions of sale of Grinding Media to ACC Jharkhand. ACC has issued the C-Form in the name of the appellant for the self same transactions entered by appellant with WSL. Holistically, reading of the three documents which were statutory forms required to be filed by the appellant to the state government authorities i.e., Sales Tax/VAT authorities, we find that the appellant has recorded the transactions between them and WSL as a purchase transaction and transaction between them and ACC as sales transaction for the goods delivered by WSL to ACC directly from Karnataka to Jharkhand. The entire transactions as reproduced by us herein above indicates that the said transactions is nothing but an activity of purchase and sale of the goods. Adjudicating Authority has not correctly appreciated the positions of Section 6 of the CST Act in as much as, on perusal of said section, we note it provides interstate sales transactions effected by transfer of documents of title to such goods during the movement from one state to another. In the case in hand, the goods moved from Karnataka to Jharkhand the transfer of documents t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on limitation and took a stand before the Adjudicating authority that the entire transaction is of trading and they have not acted as a commission agent hence liability to Service Tax does not arise; the entire issue is hit by limitation. Adjudicating Authority after following the due process of law did not agree with the contentions raised by the appellant and confirmed the demands alongwith interest and also imposed penalties holding that the said activity would fall under the category of Business Auxiliary Services. 3. Ld Counsel after taking us through the transactions between appellant and WSL submits that the Adjudicating Authority has erred in confirming the demand. It is his submission that the goods in question were consigned by the WSL directly to ACC in Jharkhand. It is his submission that the appellant being manufacturer of Grinding Media, was having capacity constraint hence got the order manufactured from his own subsidiary company. It is his submission that as per provisions of Section 6(2) of Central Sales Tax Act, second sale can be effected by transfer of documents of titles to such goods during their movement of goods from one state to another. It is his sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in hand while appellant produced ample evidences showing the transactions between appellant and WSL were in nature of sale and purchase. He would rely upon the decision of the Tribunal in the case of JR Communications and Power Controls vs CCE - 2009(91) RLT 398 for the proposition that the discount given cannot be considered as exemption. It is his submission that without prejudice the submissions made earlier violation, if any, can be at the most a breach of provisions of CST Act, and may not have service tax angle and definitely not a service under Business Auxiliary Services. It is also his submission that the WSL had discharged Central Excise duty on the entire sale value of the goods to ACC on a price on which appellant has sold the goods, hence the same transaction cannot be taxed under Service Tax. 5. Ld Dept Representative on the other hand would submit that the appellant had acted as a commission agent. To support such an argument, he places reliance on the definition of mercantile agent as per Section 2(9) of sale of goods Act. It is his submission that appellant having placed an order on behalf of ACC to WSL, have represented themselves as commission agent or Del Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a purchase order in the name of WSL for the finished goods to be delivered directly to ACC Jharkhand; purchase order also indicated discharge of Central Excise duty as also CST @ 4% and the goods should be delivered directly to ACC Jharkhand. WSL delivered the goods to ACC Jharkhand and raised the commercial invoices to the appellant and duty paying documents indicated appellants name as buyer. The bone of contention between the dept and the appellant is an amount which has been offered as discount to the appellant by WSL on the transactions of sale of Grinding Media to ACC Jharkhand. 9. We perused the records and more specifically the purchase orders and various documents placed on record by the appellant. We find that the Adjudicating Authority in Paragraph No 46 has come to a conclusion that the appellant herein is an intermediary either can be a buyer and seller or a commission agent. It is also the findings that the appellant has to be construed as a commission agent due to there being no movement of goods either real or contemplated from WSL to Aia and it is only a fiction created by the appellant in order to avoid discharge of service tax liability. 9. We do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer of documents took place during such movement is not in dispute. 11. Thirdly, we find that the Adjudicating Authority has illustrated the transactions in Paragraph No 41 of the OIO. On perusal of such illustrative documents, we find that the WSL has raised the Excise duty paying invoice on which they have indicated discharge of CST @ 3% and invoiced the same to the appellant herein. The appellant herein has in turn invoiced the entire amount with CST to ACC and submitted C-Forms given by ACC to the VAT authorities. The VAT authorities have not disputed these transactions and has accepted that this is an interstate sales transactions though there was no movement of goods from Karnataka to Gujarat and Gujarat to Jharkhand. 12. In our considered view, this activity of the appellant cannot be considered as a Business Auxiliary Services and liable for Service tax under the Finance Act, 1994. Apex Court in the case of State of Tamil Nadu vs Dhrangadhara Trading Co Ltd (Supra) has held that benefit of section 6(2) of CST Act cannot be denied for subsequent sale made to predetermined buyer, is the ratio that will be applicable. 13. The judgement relied upon by the Ld Dept R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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