2013 (8) TMI 149

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....iliary Service'; for failure to obtain registration and filing returns disclosing amounts received from the taxable service. Show Cause Notice dated 30.08.2010 was issued alleging evasion of service tax to the tune of Rs. 45,579/-, for the period 01.02.2008 to 31.03.2010, besides proposing levy of interest and penalties under relevant provisions of the Finance Act, 1994 (the Act). After consideration the petitioner's objections to the Show Cause Notice and providing a personal hearing, the adjudicating authority confirmed the demand of Rs. 45,579/-, along with interest under Section 75 and penalty under Section 77. The specified penalty under Section 78 was also imposed besides penalty under section 76 of the Act. 2. Aggrieved, the a....

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....es a distributor of the company for the purpose of selling the company's product under the RCM plan. Minimum purchases in terms of RCM products prescribed by the company from time to time is compulsory for a distributor during the month in which he desires to have the commission credited in his account. Company is obligated to remit consideration to the distributor for selling the company's product as per terms of conditions specified in the RCM Business Marketing Plan of the company. Particulars of the RCM Business Marketing Plan have been set out in the adjudication order. As per this plan a distributor gets commission on the supply made by FSL and also a share in the commission for introducing new customers, after such distributor propag....

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....er but is dividend paid to 'A' for his efforts for introducing the scheme to new introducees who also become distributors of FSL. 7. On analysis of the terms and conditions of similar agreements between the FSL and the petitioners, the adjudicating authority confirmed the tax liability against the appellants. We are satisfied that RCM (Right Concept Marketing) Business Marketing Plan is neither a new arrangement nor there is any concept of dividends as suggested by the Ld. Counsel. This is a clear Multilevel Marketing Service Scheme. The consideration/commission received by the appellants from FSL (this fact is not disputed) is the result of the marketing/promotion of FSL products by the appellants and constitutes a service (Business Aux....