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2017 (12) TMI 683

Business Auxiliary Service - marketing services in relation to sale of paper bags - Held that: - the appellant has claimed that they are eligible for CENVAT credit on the service tax paid by Shri V.M. Radhakrishnan for the commissions paid by the appellant to him. In that case, the services rendered by Shri V.M. Radhakrishnan is an input service for appellant. If this is to be accepted then the case of appellant that part of the commission pertains to Shri V.M. Radhakrishnan is incorrect - the appellant is liable to pay the service tax on the entire commission received by him. - CENVAT credit of service tax paid by Shri V.M. Radhakrishnan - Held that: - The documents placed require verification and for this limited purpose, matter is re .....

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ds produced or provided by a client would fall under Business Auxiliary Service (BAS) as defined under section 65(19) of the Finance Act, 1994. The said services became exigible to service tax with effect from 9.7.2004 as exemption to the commission agents was granted for the period 1.7.2003 to 8.7.2004 vide Notification No. 13/2003-ST dated 20.6.2003. 2. On verification of records and investigations conducted by the department, it appeared that the appellants have rendered Business Auxiliary Services and did not obtain registration or discharge the service tax liability on the commission received. The appellant had received commission to the tune of ₹ 84,63,559/- for the period 9.7.2004 to 31.7.2006 for the services rendered to M/s. .....

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t has paid service tax of ₹ 3,90,831/-. Both these amounts together would cover the liability over the entire amount of commission. He contended that the discharge of the service tax liability by Shri V.M. Radhakrishnan would absolve the liability of the appellant who is the main contractor. (b) The second argument put forward by the ld. counsel is that in any case, the appellant would be eligible to avail CENVAT credit on the service tax paid by Shri V.M. Radhakrishnan on the commission paid to him and therefore the appellant should be given the benefit of adjusting the CENVAT credit to the tax demand for the said period. (c) The ld. counsel has also argued that immediately on being pointed out, the appellant had paid the service tax .....

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M/s. Ballarpur Industries Ltd., service tax paid by Shri V.M. Radhakrishnan has nothing to do with the commission received by the appellant. That the authorities below have rightly rejected this contention put forward by the appellant since the same is not supported or established by documents. It is also pointed out by ld. AR that the appellant has not produced any contract or any other document to show that Shri V.M. Radhakrishnan was engaged as a sub-agent by M/s. Ballarpur Industries Ltd. The appellant has failed to discharge the service tax liability and has deliberately suppressed the facts and therefore the penalties imposed are legal and proper. 5. Heard both sides and perused the records. 6. The main contention of the appellant is .....

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pur Industries Ltd. is untenable. In fact, in the reply to the show cause notice, the appellants have stated in para 2(b) as under:- (b) AS already mentioned in para 2 of our letter dated 8.9.2006, we availed the services of a sub agent to undertake various activities as referred in question No. 4 of our statement dated 19.8.2006. Our sub agent Shri V.M. Radhakrishnan, Palakkad, has already discharged the applicable service tax on the commission payments received from us for which we are entitled to avail cenvat credit under Rule 3 of the CENVAT Credit Rules, 2004. (Emphasis supplied) 7. Thus, it can be seen that the appellant has claimed that they are eligible for CENVAT credit on the service tax paid by Shri V.M. Radhakrishnan for the com .....

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