Service tax on affiliation income held unsustainable, with demand notices quashed under binding precedent.

Service tax was held not leviable on income received on account of affiliation, as the issue was treated as covered by binding Division Bench authority. On that basis, show cause notices demanding service tax for the relevant periods could not be sustained and were quashed in favour of the assessee.

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Issues: Whether service tax could be levied on income accruing from affiliation and whether the show cause notices demanding such tax were liable to be quashed.

Analysis: The demand related to service tax on amounts received for affiliation during the periods July 2012 to March 2017 and April 2017 to June 2017. The issue was treated as covered by binding Division Bench authority holding that service tax is not leviable on income accruing on account of affiliation. On that basis, the impugned show cause notices could not be sustained.

Conclusion: Service tax was held not leviable on affiliation income, and the show cause notices were quashed in favour of the assessee.

Ratio Decidendi: Income received on account of affiliation is not subject to service tax, and demand notices founded on such levy are unsustainable.

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