TMI Blog2023 (12) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... 22.12.2012 passed by the Commissioner (Appeals) whereby he has modified impugned order passed by the Original authority and confirmed the demand of service tax of Rs. 2,19,819/- along with equal penalty and also demanded interest and penalties under Section 75A, 77 and 78 of the Finance Act, 1944. 2. Briefly the facts of the present case are that appellant no. 1 was a distributor of M/s Amway India Enterprises, C-3, Qutab Industrial Area, New Delhi (hereinafter referred to 'Amway'), a direct selling company engaged in business of selling products through its distributors. In direct selling, instead of middlemen, the sale was made directly to customer through a network of people by involving many people who sold a small amount of volumes each, which results in a huge volume for the entire network. Any person who was interested in joining the business of Amway has to become its distributor and this new person has to be sponsored by the existing distributor. Amway and its distributors have a binding contractual relationship as per terms and conditions laid down in the Amway Distributor application form, Amway Sales and Marketing plan, Amway Rules of conduct and other lit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al authority for De-novo adjudication strictly in terms of observation and directions passed by the Tribunal in those appeals. 7. The Ld. Counsel further submits that in the present case also identical issue is involved and therefore prayed that this case may also be disposed of on the same lines by which the Tribunal disposed of all 83 appeals in the case of Paramjit Kaur others vide final Order No. A/51818-51855/2015. 8. On the other hand, Ld. AR for the Revenue also accepted the fact that the facts in the present case are identical with the facts involved in those cases which were remanded by the Tribunal vide order dated 09.06.2015. 9. We have considered the submissions of both the parties and perusal of the material on record and also the judgment of the Tribunal in the case of Paramjit Kaur others vide which the Tribunal disposed of 83 appeals by remanding the matter to original authority for de-novo adjudication. It is pertinent to reproduce the relevant findings of the decisions of the Tribunal which is mentioned as under: 9. The appellants in the appeals ST/138 and 139/2009, ST/406/2010, ST/522 to 525, 257, 259, 433,473,502,580,1123,1383,1781 1802/2011, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service provided to a client by Commercial concern in relation to the Business Auxiliary Service is taxable. The term Business Auxiliary Serviceis defined under Section 65(19) of the Finance Act, 1994 as under:- Section 65(19): Business auxiliary servicemeans any service in relation to,- (i) Promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) Promotion or marketing of service provided by the client; or [Explanation For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, service in relation to promotion or marketing of service provided by the clientincludes any service provided in relation to promotion or marketing of games of chance, organized, conducted or promoted by the client, in whatever form or by whatever name called, whether or not conducted online, including lottery, lotto, bingo;] (iii) Any customer care service provided on behalf of the client; or (iv) Procurement of goods or services, which are inputs for the client; or x x x x x x x x x x x x x x x x x x x x x x x x 12. According to the Department, the activity of the assessees is promotion or marketi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is linked to the performance of his sales group (group of the second level of distributors appointed on being sponsored by the Distributor) 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 the commission earned by him on the basis of the volume of purchases of Amway products made by his sales group i.e. group of second level of Distributors appointed by Amway on being sponsored by the Distributor. For quantifying the service tax demand on the commission received from Amway on the volume of purchase made by the distributors sponsored /enrolled by a particular distributor i.e. the Distributors sales group, these matters would have to be remanded to the Original Adjudicating Authority. 14. Another objection raised by the appellants in appeals n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stributors (assessees) for the exemption notification no.6/2005-ST has not been examined and for this purpose also, these matters have to be remanded to the Original Adjudicating Authority. 16. Another plea raised in these appeals is regarding limitation. It is the contention of the assesses that there was absolutely no suppression or misstatement of facts or deliberate contravention of the provisions of the Finance Act, 1994 or of the Rules made thereunder with intent to evade payment of service tax. The Departments contention, on the other hand, is that the assesses neither obtained service tax registration nor did they declare their activities to the jurisdictional service tax authorities nor did they file ST-3 Return and, therefore, they are guilty of suppression of relevant facts and deliberate violation of the provisions of Finance Act, 1994 and of the Rules made thereunder with intent to evade payment of tax. On considering the rival submissions on this point, we are of the view merely because the assesses did not apply for Service Tax Registration or did not file ST-3 Returns or did not declare their activities to the jurisdictional central excise authorities, it cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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