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M/s. Trinity Papers India (P) Ltd. Versus Commissioner of Central Excise, Coimbatore

2017 (12) TMI 683 - CESTAT CHENNAI

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 a .....

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unt of commission received by Shri V.M. Radhakrishnan - the appellant has put forward a reasonable cause for not discharging service tax liability and there is sufficient ground to invoke section 80 of the FA, 1994 - penalty upheld. - Appeal allowed in part and part matter on remand. - ST/523/2009 - Final Order No.43088/2017 - Dated:- 7-12-2017 - Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri T. Ramesh, Advocate for the Appellant Shri B. Bala .....

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r etc. The appellants were appointed as a representative of M/s. APR Packaging Ltd. for marketing services in relation to sale of paper bags. The activity of such marketing services being a service in relation to promotion or marketing of sale of goods 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 .....

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APR Packaging Ltd., a unit of M/s. Ballarpur Industries Ltd. and ₹ 2,65,676/- to other parties respectively. Statements were recorded. Show cause notice dated 10.1.2008 was issued for the demand of service tax along with interest and also proposing to impose penalties. After due process of law, the original authority confirmed the demand of ₹ 8,88,712/- along with interest and appropriated the amount already paid by the appellant and imposed penalties. Aggrieved, the appellants filed .....

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sub-contractor, the service tax paid by Shri V.M. Radhakrishnan should be adjusted to the demand raised against the appellant. That the entire service tax due has been paid. Out of the total amount received as commission, an amount of ₹ 47,11,000/- pertains to services rendered by Shri V.M. Radhakrishnan for the marketing activities done by him in Palakkad, Kerala. Only the balance pertains to the appellant Shri V.M. Radhakrishnan has paid service tax of ₹ 4,67,555/- and the appellan .....

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aid 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 with respect to the commission received by them and had not discharged the service tax liability only with regard to the commission pertaining to Shri V.M. Radhakrishnan. That they were under bonafide belief that they are not liable to pay service t .....

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ishnan and thus service tax paid by Shri V.M. Radhakrishnan is on a different transaction which is between the appellant and Shri V.M. Radhakrishnan only. There is no evidence to show that Shri V.M. Radhakrishnan received commission from M/s. Ballarpur Industries Ltd. That the appellant has received a total commission amount of ₹ 87,29,235/- from M/s. Ballarpur Industries Ltd. and the appellant is liable to discharge the service tax on the said amount. That the appellant has not produced a .....

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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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hakrishnan has discharged service tax of ₹ 4,67,555/- on the commission received by him. That therefore the entire service tax liability stands discharged. We are not able to comprehend or accept this contention put forward by the appellant. At the outset, there is no document placed before us to show that Shri V.M. Radhakrishnan was acting as an agent for and on behalf of M/s. Ballarpur Industries Ltd. / APR Packaging Ltd. In fact, invoices issued by Shri V.M. Radhakrishnan are raised in .....

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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 entitle .....

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