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Rama Marketing Versus Commissioner of Central Excise, Kolhapur

2015 (5) TMI 66 - CESTAT MUMBAI

Demand 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 .....

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o 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 .....

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mpugned order, the learned lower appellate authority has upheld the confirmation of service tax demand on the amount received towards cost of the packing materials as consideration for the services rendered by the appellant M/s. Rama Marketing, Kolhapur to M/s. Rajarambapu Patil Sahakari Sakhar Karkhana Ltd. (RBPSSKL), to whom they are providing the services as a sole selling agent and on the incentive received discharged service tax liability under Business Auxiliary Service'. The lower app .....

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n threshold limits @ ₹ 5 per box on which they have discharged service tax liability. The appellant is also procuring the raw materials for RBPSSKL on which VAT liability is discharged by them at the time of purchase of the raw materials and when it is subsequently sold to M/s. RBPSSKL. On account of trading transaction undertaken, the appellant earns some profit. The case of the department is that, on the trading profit made, the appellant is liable to discharge service tax liability whic .....

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s. Accordingly, it is pleaded that the impugned demands be set aside. 4. The learned Assistant Commissioner (AR) appearing for the Revenue, on the other hand, would submit that as per the agreement entered into between the appellant and RBPSSKL, the appellant was required to procure raw materials and submit the same to the latter and the difference in the procurement and sale price is a consideration for the services rendered as a sole selling agent as both these transactions are undertaken as p .....

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