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Mr. Pritpal Singh Sandhu Versus Commissioner of Central Excise And Service Tax, Ludhiana

Business Auxiliary Service - small service exemption - Brand name - Distributors of Amway - wilful misstatement or suppression of facts - Invocation of extended period of limitation - Held that:- Marketing or sale promotion of branded products by a person/ commission agent does not amount to providing branded service by him and hence, marketing or sales promotion of a branded product does not come under the exclusion category as mentioned in the proviso to notification no.6/05-ST - Decision in t .....

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have been filed against order-in-appeal No. LUD-EXCUS-000-APP/105 to 107-14-15 dated 28/04/2014 in terms of which the service tax demand of ₹ 90,995/- was confirmed vide order-in-original dated 18/02/2013 was upheld along with interest. However, penalties under Sections 75A, 76, 77 and 78 of the Finance Act 1994 were set aside. The impugned demand was confirmed under Business Auxiliary Service on the commission received from M/s Amway by the appellant by virtue of being a distributor of M/ .....

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in some cases such demands were dropped, and therefore also, the extended period is not invokable. 3. The Ld. DR fairly stated that the issues involved in this case have been decided by CESTAT in appeal number ST /138/2009 pertaining to Mr. Charanjit Singh and other related appeals vide final order no. 51818-51855 dated 09/06/2015 and that this case should, therefore, be remanded for being decided de-novo by the original adjudicating authority in terms of the aforesaid judgement of CESTAT. 4. W .....

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view, the activity which is covered under Section 19(i) is in relation to the promotion or marketing or sale of the goods produced by the client or provided by the client or belonging to the client. This expression, in our view, would not cover the sale of the goods by a person, which belong to him, as the activity of the promotion or marketing or sale of the goods by a person belonging to him would not constitute service. The assessees in these cases are distributors, who purchase the goods fr .....

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Amway, those products cease to belong to Amway, but belong to the Distributor and sale of these goods by the Distributor would not constitute service to Amway. For the same reason, any incentive or commission received by a Distributor from Amway for buying certain quantum of goods from Amway during a month can not be treated as the consideration received for promotion or marketing or sale of the goods produced by or provided by or belonging to the client, more so, as this commission is not link .....

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be roped in for sale of the Amway products/marketing of the Amway products and who on being sponsored by that Distributor are appointed by Amway as second level of distributors is, in our view, the activity of marketing or sale of the goods belonging to Amway and the commission received by the Distributor from Amway, which is linked to the performance of his sales group (group of the second level of distributors appointed on being sponsored by the Distributor) would have to be treated as conside .....

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of the volume of purchases of Amway products made by his sales group i.e. group of second level of Distributors appointed by Amway on being sponsored by the Distributor. For quantifying the service tax demand on the commission received from Amway on the volume of purchase made by the distributors sponsored /enrolled by a particular distributor i.e. the Distributor's sales group, these matters would have to be remanded to the Original Adjudicating Authority. 14. Another objection raised by th .....

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Auxiliary Service and the individual persons cannot be treated as Business concern. We do not accept this plea as a business concern can be a proprietary firm also which is owned by an individual and there is no difference between proprietary firm owned by a person and that person. When an individual engages himself in a commercial activity, he has to be treated as business or commercial concern. Therefore, notwithstanding the fact that w.e.f, 1.5.2006 the term, 'commercial concern' in .....

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