TaxTMI 
TaxTMI 
2009 (8) TMI 958
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....ce amount was transferred to M/s. RBPSSK; that it was further provided in the said agreements that the service provider would undertake to arrange for lifting of 90,000 cases of country liquor per quarter and if lifting is more than 90,000 (in 2000 agreement, no. of cases was 40,000), for excess lifting, the sale incentive was to be paid to the appellant; that it was also provided in the agreement that the appellant will collect orders from the market and for proper planning of production, service provider will declare the lifting schedule prior to production of next month; that the appellant will not enter into agreement with any other party during the period of contract; that M/s. RBPSSK will not procure or purchase packaging material directly from other suppliers, other than service provider; that the packing material cost supplied by service provider is to be settled after country liquor price was arrived at; that basing on the above facts, the department directed the appellant to provide the information of their activities and the appellant obtained registration for "Business Auxiliary Service" (BAS in short) and started paying Service tax on the incentive amount received from....
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....s for M/s. RBPSSK and not for others and hence, it is argued that they (the appellant) were not known as supplier of packing material; (iii) that in a trade, consideration is taken in one form or other and in the present case, service provider is retaining cost of packing material which is nothing but hypothetical calculated value; (iv) that if the service provider was to sell only packing materials, then there is no need for him to supervise the production of country liquor, to collect orders and collect bills etc.; (v) that the transaction regarding packing material was independent, cannot be accepted; (vi) the sale incentives cannot be considered as only consideration for the services provided; (vii) that charges in the SCN regarding evasion of Service tax by adopting this modus operandi are proved. 2. Being aggrieved by the order, the appellant has come up with present appeal along with stay petition. The contentions of the appellant are summarized as under :- (i) that the appellant is purchasing the country liquor boxes and selling the same in the market and it is wrong to hold that they are providing Business Auxiliary services to M/s. RBPSSK and the appe....
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.... Products v. CCE - 1989 (43) E.L.T. 195 (S.C.) and the Tribunal decision in the case of CCE v. Ganpati Motors - 2008 (12) S.T.R. 729. 3. PH was held on 10-8-2009 at 03.15 PM at Kolhapur. Shri V.B. Gaikawad, Advocate, duly authorized by the appellant appeared before me. None appeared from Department's side despite intimation. During the hearing, the Advocate reiterated the submissions made in the appeal memorandum. 4. I have gone through the case records including record of PH. After dispensing with pre-deposit, I take the main appeal itself for decision. In the instant case, the appellant has not disputed the activities which are falling under "BAS". The appellant only disputes that the profit earned for selling the packing materials, essence, and flavours to M/s. RBPSSK should not be taken for the purpose of charging Service tax under BAS. Therefore, the lone issue to be decided in the instant appeal is that whether amount earned by the appellant towards the sale of said materials could be considered as the value of services rendered to his client i.e. M/s. RBPSSK. The adjudicating authority has held that since the appellant was not getting any monetary consideration for the....
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....is no seller and buyer relationship exists in the transaction. The appellant also has failed to produce any independent evidence showing that he has sold the materials to his client and collected the cost of the materials from his client. In the absence of such vital evidence, it has to be concluded that selling and buying relationship has been created on 'paper'. In other words, their transactions cannot be treated that the appellant has sold the packing materials etc. to his client and his client purchased the same from the appellant. Another strange thing created in the agreement is that the appellant would get only incentive, if he lifts excess boxes of country liquor after crossing 40,000/90,000 cases. In other words, the appellant is not getting any monetary consideration till he lifts the excess cases upto 40,000/90,000 as the case may be. The appellant claims that he is doing free services upto certain selling and after crossing the limit fixed in the agreements, the appellant would get the incentive. No doubt, when there is free service, there will not be any Service tax. But the situation in the instant case is different, in as much as that the appellant is getting credit....