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Commissioner of Service Tax, Ahmedabad Versus M/s. Dharmshil Agencies

2015 (11) TMI 223 - CESTAT AHMEDABAD

Benefit of exemption Notification No. 13/2003-ST dated 20.6.2003 - Commission Agent service - Held that:- commission was paid on principal to principal and case to case basis, depending upon various factors and quantum of commission is depending on such sale or purchase by the customer from the principal. It is categorically stated that they received commission only on sale of materials and payment is received from the customer. Notification No. 13/2003-ST extended the exemption to Business Auxi .....

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thin the knowledge of the Respondent that this exemption notification was amended by Notification No. 08/2004-ST dated 09.7.2004. It is noted that they have started paying service tax from 10.09.2004 but there is no reason as to why they were not paying service tax from 09.7.2004. We have also noticed that respondent had not filed monthly ST-3 returns during the period 01.7.2003 to 09.09.2004. The adjudicating authority observed that Respondent suppressed the material fact regarding receipt of C .....

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J. Nair, Authorised Representative For the Respondent : Shri Uday Joshi, Advocate ORDER Per : Mr. P.K. Das; The Revenue filed this appeal against the order of the Commissioner (Appeals) where the adjudication order was set-aside. 2. The relevant facts of the case, in brief, are that the Respondent was holding the Service Tax registration under the category of Consulting Engineer and Business Auxiliary Service . A show cause notice dated 25.01.2007 was issued proposing the demand of service tax .....

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ation. The adjudicating authority confirmed the demand of service tax alongwith interest and also imposed penalties under various sections. The Commissioner (Appeals) set-aside the adjudication order and allowed the appeal filed by the Respondent on merit. 3. Learned Authorised Representative for the Revenue reiterates the grounds of appeal. He submits that the Commissioner (Appeals) held that the Respondent carried out promotional activities of the products. It is submitted that promotional act .....

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liable to be upheld. 4. Learned Advocate on behalf of the Respondent submits that the nature of activities by the Respondent is predominantly of sale of goods. He drew attention of the Bench to reply to the show cause notice, where it is stated that they received commission depending on the sale of goods. He submits that the other activities in connection with sale of goods are incidental. He relied upon the decision of the Tribunal in the case of CCE, Vadodara-I vs. M.A. Menon & Co. 2009 (1 .....

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that the Respondent was engaged in providing services as Commission Agent for products such as yarn and textile machinery. It is seen from the reply of the show cause notice that the commission was paid on principal to principal and case to case basis, depending upon various factors and quantum of commission is depending on such sale or purchase by the customer from the principal. It is categorically stated that they received commission only on sale of materials and payment is received from t .....

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alf the Revenue is that the Respondent provided services much beyond the scope of a Commission Agent, as defined in the Explanation to exemption notification, as the Respondent was also responsible for the realisation of the sale proceeds, installation of machinery (as and when required) and had also carried out the sales promotional activities by way of survey and other means. We find that the Respondent had took a definite stand before the lower authorities that they received commission when t .....

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-I vs. M.A. Menon & Co. (supra) held that primarily the Respondent is a Commission Agent and other activities are incidental thereof. The relevant portion of the said decision is reproduced below:- 3. We have considered the submissions made by both the sides. There is no dispute as regards facts. As per facts on record, the respondents are required to promote entire product range of the principal which involves identification of customers, explain the utility of the product, obtain samples f .....

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nd payment is received from the customers. However, if business auxiliary services was the main activity, the Revenues could not have been linked totally to the sale of the product. We agree with the view taken by the Commissioner that primarily the respondent is a Commission Agent and other activities are to incidental to commission agency and therefore, their claim for benefit of exemption under the notification cited above is to be allowed. In view of discussions above, the appeal filed by th .....

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