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The Commissioner of Central Excise Versus M/s. Bharat Cell

2015 (10) TMI 1111 - MADRAS HIGH COURT

Buying and selling of BSNL cards - sale activity or not - whether only commission was paid by the BSNL to the franchisees or not and decision given by the Bangalore Tribunal should be followed or not.

Held That:- Similar questions have been considered by the CESTAT Principal Bench, New Delhi and the same is answered in favour of the assessee and against the Revenue – Decision made in the case of G.R. Movers vs. Commissioner of Central Excise, Lucknow [2013 (6) TMI 339 - CESTAT NEW DEL .....

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ding the case in favour of the assessee that there is only buying and selling of cards, when the fact remains that there is no sale involved and only commission was paid by the BSNL to the franchisees and 2. Whether in the facts and circumstances of the case the Appellate Tribunal is right in deciding the case in favour of the assessee based on a decision given by the Bangalore Tribunal wherein the existence of a Franchisee Agreement was not brought to the attention of the Tribunal " 2. The .....

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SA. (iv) Retention Bonus (ii) The franchisee / distributor is liable to pay service tax since 1.7.2003 onwards on the Commission / Margin / Bonus received from BSNL both for post paid and pre paid BSNL cards under the category Business Auzillary Services . The information on the above types of commission paid to the party were solicited from D.G.M. (IMPCS), CTO Compound, Trichy - 1. The G.M. (CMTS), BSNL, Trichy had vide their letter ref No. GM/CMTS/Tr.Service Tax/2005-06 dated 27.1.2006 furnish .....

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ry Services. Scrutiny of the records received from BSNL by Head Quarters Preventive Unit revealed that the assessee had received a commission of ₹ 17,65,562/- during the period 7/03 to 3/05 and the service tax payable works out to ₹ 1,67,739/- (STRs. 1,65,330/- and E.Cess-Rs. 2,409/-). Though the assessee hold centralized registration for payment of service tax, it was noticed that they have not paid Service Tax on the Commission received on the prepaid cards as listed by BSNL and ha .....

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amount of ₹ 1,67,739/- (Service Tax of ₹ 1,65,330/- + ₹ 2,409/- Education Cess) and also imposed a penalty of ₹ 1,67,739/- under Section 78 of Chapter V of Finance Act, 1994 and also a penalty of ₹ 1,000/- under Section 77 of Finance Act, 1994. (iii) On an appeal by the assessee, the Commissioner of Central Excise (Appeals), vide his order dated 17.06.2008, allowed the appeal. Aggrieved over the same, the Department filed an appeal before the Tribunal which came to .....

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der reads thus, 23. The argument of the distributors in the present case is not as unreasonable as illustrated int he example discussed above. The following aspects need to be noted in this regard. This is not a case where the distributor is doing a service, billing for it, collecting the charges fo rhte service and then BSNL charging for the services to the customers through a separate process. On the contrary this is a case where BSNL sells the cards through the distributor and collects money .....

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