TaxTMI 
TaxTMI 
2015 (9) TMI 788
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....ommon order. 2. The relevant facts that arise for consideration in all the appeals are the appellants are distributors for M/s. RMP Infotech Pvt. Ltd. which is a binary network company having business model, that they enrol Direct Independent Distributors to promote the company's packages and canvas for enrolment of new members to create a chain of distributors who are as per agreement under compulsion to buy products from shopping section of M/s RMP every month; M/s RMP issues payment advice to each distributors indicating therein commission payable to the distributors. It is the case of the Revenue that appellants are not independent traders but commission agents of M/s. RMP and hence they are liable to pay service tax on the amount ....
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....n extreme case is an amount paid as commission to the appellants and submits that appointment of subsequent distributors by the distributor appointed by the appellants has no bearing on the functioning of the appellants. He would submit that definition of Business Auxiliary Service is not covering the arrangement like the one which is in this case. He would submit that the Budget Changes of 2010-11 it brought into service tax net the multilevel marketing system hence these activities are to be covered after 2011, which is an indicative factor that the services rendered by the appellants during the period 2007-08 onwards to 2011-12 are not taxable. He would then submit that the decision of this Tribunal in the case of Shri Surendra Singh Rat....
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....se of Shri Surendra Singh Rathore and Smt. Chanda Bohra (supra) and reads the said decision. 5. We have considered the submissions made by both sides and perused the records. 6. The issue to be decided in this case is whether the appellants are covered under the category of Business Auxiliary Services by virtue of being distributors and appointing further distributors for the sale of goods of M/s. RMP and getting paid a commission for the sale effected to chain of distributors below them. Undisputedly appellants herein appoint two distributors and encourage the said two distributors to appoint further distributors and the chain continues. Appellants claim this is not multilevel marketing scheme or binary is totally incorrect; on reading t....
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....conditions of the agreement between the parties, FSL issues a scratch card having a password along with a standard product "Kit of the Products" by charging a price for same. Any person can submit an application through the internet using password and after acceptance becomes 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 Marketin....
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.... has the submitted that 'A' gets commission on purchases made by 'C' 'D' and 'E'. It is alternatively contented on behalf of the appellants that the so-called commission paid by FSL to the appellant in respect of purchases made by subsequent distributors 'C' 'D' and 'E' does not amount to commissions for promotion or marketing activities permitted by the petitioner 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 ....