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TMI Blog2015 (9) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... r respectively (hereinafter referred to as the 'adjudicating authority'). As the issue involved in both the above mentioned appeals is identical, I take up both these appeals for disposal through this common order. 2. Briefly stated the facts of the case are that the appellant is working as distributor of M/s. Fashion Suiting (P) Ltd. (RCM Business), SPL-6, RIICO Growth Centre, Post Swaoopganj, Via-Hamirgarh, Bhilwara (hereinafter referred to as "M/s. FSL") for selling products for which she received commission from M/s. FSL, which falls under the "Business Auxiliary Service" and attracts Service Tax w.e.f. 1-7-2003. M/s. FSL are engaged in the multilevel marketing termed as Right Concept Marketing of various types of goods such as garments, washing powder, tea and other misc. grocery items produced or procured by them. These goods are marketed and sold by them through their dedicated network of distributors, Multilevel marketing starts with a person approaching M/s. FSL and purchasing their products of certain value and this purchase is termed as "Kit Purchase". Thereafter, a distributor may also make further purchases on his/her account which are called "repurchases". As pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act ibid; that encompass any activity within the preview of the definition of "Business Auxiliary Service" one of the basic ingredients namely service provided to a client or service rendered as a Commission Agent must be present; that M/s. FSL was neither a client of the appellant nor appellant was providing any service as Commission Agent; that M/s. FSL sold a joining Kit in open sale along with a Scratch ID; That anyone who bought the kit could apply for the distributorship of the company and on acceptance of application became a distributor; that the relation between M/s. FSL and the appellant was of the Buyer & Seller and not of service provider & service recipient; that thus, M/s. FSL was neither a client of the Appellants nor Appellants were providing any service as Commission Agent, Consequently none of the requisite ingredients to qualify the activity of the Appellant as "Business Auxiliary Service" as defined under clause (19) of Section 65, were present; (iii) That the appellant as per condition of the terms & conditions was purchasing goods produced or belonging to M/s. FSL and thereafter as per other condition, was working as independent vendor; that as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice Tax; (viii) that since the Appellant was under a bona fide belief that she was not liable to pay any Service Tax under the alleged category of service or any other service, thus if any penalty was imposable under Section 77 and 78, the same was to be waived in view of provisions of Section 80 of the Act as there was reasonable cause for said failure; 4. Personal hearing in this case was held on 8-1-2014. Sh. Vikrant Kackria, Advocate appeared on behalf of the appellant and reiterated the submissions made in their appeal. He further submitted that they have filed subsequently another appeal on the same issue for the previous period on 6-1-2014. He further prayed that both the appeals may be decided together. 5. I have carefully gone through the facts of the case and the submissions made in the grounds of appeal. It has been alleged in the show cause notice that the appellant is selling various types of products of M/s. FSL under the concept of multilevel marketing termed as "Right Concept Marketing", as a distributor through their dedicated network of distributors called her down-liners and received various kind of incentives, commission etc. in a pre-defined manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion agent, but does not include any information technology service and activity that amounts to 'manufacture' within the meaning of clause (f) of Section 2 of the Central Excise Act, 1944 (1 of 1944). Explanation - For the removal of doubts, it is hereby declared that for the purpose of this clause, (a) "commission agent" means any person who acts on behalf of another person and causes sale or purchase of goods or provision or receipt of service for a consideration and includes any person who, while acting on behalf of another person - (i) deals with goods or services or documents of title to such goods or services or (ii) collects payment of sale price of such goods or services or (iii) guarantees for collection or payment of such goods or services or (iv) undertakes any activities relating to such sale or purchase of such goods or services. 7.1 Further Section 65(105)(zzb) of the Act defines the term taxable service for business auxiliary services as under :- "Taxable service means any service provided or to be provided to a client, by any person in relation to business auxiliary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iners and there is no evidence on record to establish that sales tax has duly been paid on the full sale value of such incentives and commissions. Thus the, adjudicating authority has rightly held that the activities carried out by the appellants are covered under the category of Business Auxiliary Services and thus are taxable. 8.2 Further, I find that appellant has also contended that in an identical issue , the then Commissioner (Appeals) Central Excise, Chandigarh-II vide O-I-A No. 75/ST/Appl/CHD-II/2012, dated 6-3-2012 in the case of M/s. Jaswant Singh, H. No. 362, Sector-15, Dashmesh Nagar Kharar, Distt- Mohali (Pb.) had accepted the appeal of the party. I find that the said Order-In-Appeal dated 6-3-2012 is not a binding precedent for the undersigned. Further, I observe that I am bound by the law of precedent and binding effect of the order passed by the higher authority or Tribunal of superior jurisdiction only. As such, the plea of the appellants on this count is not maintainable. 9. In view of the above, I find that on merit, the activity undertaken by the appellants squarely falls under the ambit of Service Tax, however, as per records put before me, the tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and accordingly, the Appeal No. 1 is allowed. 10. As regards appellant's contention that extended period was not invokable (in respect of appeal No. 2 in Table appended to para 1 above), as there was no will full mis-statement, concealment/suppression of facts to evade Service Tax, I find that the in this era of self assessment, it would not be prudent to accept the appellant's plea that she was under bona fide belief that no Service Tax was leviable on activities undertaken by her. Further, I find that the appellant had not taken registration with the department and were also not filing statutory returns as required under the law. This clearly reflects the deliberate intent of the appellants to evade Service Tax. I observe that they neither supplied any data regarding providing of such services to the department, nor they fulfilled statutory obligations and this act of appellants was entirely unwarranted which resulted into gross violation of law governing the issue as well as Revenue loss to the Government exchequer. Therefore, suppression with intent to evade Service Tax is clearly spelt out. In this regard, I place reliance on the order of the Hon'ble High Court of Gujara ..... X X X X Extracts X X X X X X X X Extracts X X X X
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