Distributor commission under service tax required fresh factual scrutiny on exemption, limitation, and taxable marketing activity.

Service tax on distributor commission was examined in light of an earlier Tribunal ruling that distinguished commission linked to the distributor's own purchases from commission attributable to the sales group sponsored by the distributor. The Tribunal noted that exemption eligibility and limitation had to be tested separately on the facts of each case, and because the present dispute was covered by that reasoning, the matter was remanded for fresh adjudication by the Original Authority.

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Issues: Whether the appeal deserved remand to the Original Adjudicating Authority for fresh decision in view of the earlier Tribunal order on the taxability of commission received by distributors, the applicability of exemption, and the plea of limitation.

Analysis: The dispute arose from service tax demand on commission earned by a distributor/marketing agent. The earlier Tribunal order had already laid down the governing principles on whether purchases by a distributor from the client amounted to promotion or marketing of the client's goods, and had distinguished between commission relatable to the distributor's own purchases and commission linked to the sales group sponsored by the distributor. It had also indicated that the eligibility for exemption notification and the plea of limitation required separate examination on the facts of each case. As the present appeal was covered by that earlier reasoning, the matter required fresh adjudication by the Original Authority in accordance with those directions.

Conclusion: The appeal was allowed by way of remand and the matter was sent back for de novo adjudication.

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