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2015 (10) TMI 1111 - MADRAS HIGH COURT

2015 (10) TMI 1111 - MADRAS HIGH COURT - 2015 (40) S.T.R. 221 (Mad.) - 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. Com .....

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and circumstances of the case, the Appellate Tribunal is right in deciding 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 A .....

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recharge coupons. (iii) Target achievement bonus in consultation with SSA. (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 thei .....

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he assessee has not made any payment of Service Tax on Business Auxuliary 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 o .....

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his order dated 06.06.2007, confirmed the demand of service tax of an 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 .....

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e Revenue and in favour of the assessee. The relevant portion of the order 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 .....

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the principal, that is BSNL, is easily verifiable unlike in the case of services rendered by many other sub-contractors for other type of services. 24. ... ... ... 25. Interestingly the above services as also the services of selling agent or a distributor of SIM cards or recharge coupon vouchers have been exempted from service tax vide entry No. 29 in Notification 25/2012-S.T., dated 20.06.2012. So, the special nature of services in such cass is recognized though only recently. 26. Though the co .....

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