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Shri Krishna Kumar Kaushik Versus C.C.E. &S. T., Lucknow

2015 (11) TMI 468 - CESTAT NEW DELHI

Business Auxiliary Service - Receipt of commission - small service provider exemption upto ₹ 10 lakhs - brand name belongs to another person - Held that:- Appellant has received commission from Amway India in connection with multi level marketing, which was held to be liable to service tax under BAS. The appellant has contended that he is not covered under the scope of BAS as the transactions involved sale and purchase of goods. Ld. counsel for the appellant fairly conceded that the issue .....

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er (Technical) For the Petitioner : Shri Anil Kher, Sr. Advocate And Ms. Anisha Mahajan, Advocate For the Respondent : Shri Govind Dixit, DR ORDER Per Mr. R.K. Singh : These appeals have been filed against Orders-in-Appeal No.101-104-ST/LKO/2013 dated 23.12.2013, which upheld the respective Orders-in-Original in terms of which service tax demand of ₹ 3,43,073/- and ₹ 94,160/- respectively were confirmed along with interest and penalties under Business Auxiliary Service (BAS). 2. The .....

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9.06.2015 and that these appeals can be remanded to the original adjudicating authority for deciding the matter in accordance with the said judgement. The findings/ decision of CESTAT in the case of Mr. Charanjeet Singh Khanuja & Others (supra) on the issues involved are contained in paras 12, 13, 14 and 15 thereof. These paras are reproduced below for ease of reference:- 12. According to the Department, the activity of the assessees is promotion or marketing or sale of the goods produced o .....

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cases are distributors, who purchase the goods from Amway at the Distributors Acquisition Price (DAP)) and sell the same in retail at price not exceeding MRP fixed by the Amway. This activity of the Distributors, in our view, cannot be treated as promotion, marketing or sale of the goods produced or provided by or belonging to the client (Amway), as the sale of the goods purchased by the Distributors from Amway is not the sale of the goods belonging to their client Amway. Once the Amway products .....

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t, more so, as this commission is not linked to the goods sold by the Distributor, but is linked to the goods purchased by the Distributor from Amway during a month and is in the nature of volume discount. Therefore, no service tax is chargeable on the profit earned by the distributors from sale of the goods in retail which had been purchased by them from Amway and on the commission earned by them every month on purchase of certain quantum of goods from Amway. 13. However, activity of a Distribu .....

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butor) would have to be treated as consideration for Business Auxiliary Service of sales promotion provided to Amway. Therefore, service tax would be chargeable on the commission received by a Distributor from Amway on the products purchased by his sales group. However, in the impugned orders service tax has been demanded on the gross amount of commission and no distinction has been made between the commission earned by a Distributor from Amway based on his own volume of purchase from Amway and .....

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ty. 14. Another objection raised by the appellants in appeals nos. ST/138 and 139/2009, ST/406/2010, ST/522 to 525/2010, ST/257,259, 433, 473, 502, 580, 1123, 1383, 1781 & 1802/2011, ST/56, 86, 126, 645/2012 and ST/1723-1724, 2337 and 2810/2012 and the respondents in appeals nos. ST/851 to 854, 863, 864, 865, 866, 867, 868, 869, 870 and 878/2012 is that the assesses are individuals and during the period till 30.04.2006, service tax was chargeable only on the services provided to a client by .....

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