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TMI Blog2025 (5) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... h, 2023, the instant writ petition has been filed. 3. Mr. Shivadass, learned Senior Advocate appearing in support of the writ petition by drawing attention of this Court to the Circular dated 30th October, 2009, issued by the Government of India, Ministry of Finance, Department of Revenue would submit that the Government had all along clarified that though service tax would be payable on bottling job charges, distribution costs and other reimbursables, however, the surplus/profit earned by the brand owners being in the nature of business profit which falls within the purview of direct tax will not be chargeable to service tax. He would submit that although the aforesaid Circular has been issued during the service tax regime (Finance Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that transfer of economic surplus is nothing but consideration received against transfer of intellectual property rights and by treating the same as service, the aforesaid demand-cumshow cause has been issued. He submits that in this case the petitioner has entered into an agreements with three manufactures so as to tie up for manufacturing of Indian Made Foreign Liquor and to sell the same using the brand name of the petitioner. The manufactures shall procure all raw materials and packaging materials and shall be entitled to recover the sale proceeds and after deducting the costs, the surplus shall be transmitted to the petitioner as economic surplus. In return the manufactures shall be entitled to consideration towards supply of servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inputs i.e. raw materials and packaging materials are concerned, one of the conditions of exemption notification No. 39/2009 ST is that there should be documentary proof specially indicating the value of these inputs. Therefore, service tax on the value of raw materials and packaging materials would be exempt only when such charges are specifically mentioned in the invoice raised/documents maintained by the CBU. (c) As regards the statutory levies namely excise duty/VAT, they do not represent any 'consideration' for rendering the service. Whether such amount is paid by BO or by CBU, they have no nexus with the provision of service. As such these levies will not be included for charging service tax. (d) "Similarly, the surplus/profit e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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