2018 (7) TMI 27

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....t Chennai and Delhi. They are registered with the department under the category of 'Authorized Service Station Service' and 'Business Auxiliary Service' (BAS). Pursuant to investigations conducted by the DGCEI, it appeared that the Chennai show room (Appellant 1) of the appellants advised their customers to approach the HDFC for taking insurance policies for the vehicles. So also, it appeared that the Delhi show room (Appellant 2) of the appellants advised their customers to approach the HDFC Chubbs or UIIC for taking insurance policies for their vehicles. It further appeared that there was a Business Referral Arrangement between both these appellants and HDFC Chubb, as per which for consideration for the payment of Referral Fee, appellants....

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....behalf of the appellants, Ld. Counsel Shri S. Muthuvenkatraman made oral and written submissions which can be broadly summarized as under : i) No relationship in nature of principal and client exist between HMIL and HDFC - hence order deeming that commission received in capacity of 'commission agent' is erroneous. ii) Reading definition of BAS - intention of legislature is to tax only third party who acts as an agent for / behalf of principal who undertake to sell or distribute goods or alternatively undertakes provision or receipt of services on their behalf for any consideration. iii) Commission is for service rendered for selling / distribution of goodsunder an agreement between principal and agent, principal has right over goods /....

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....ri R.Subramaniyan supports the impugned orders. 5. Heard both sides. 6. Perusal of the agreement reveals that it is not the case that appellants had provided their updated customer data base for a onetime fee. On the other hand, HDFC Chubb became entitled to access to the customer data base of the appellants and the Referral Fee was paid only as and when the former could generate and realize fresh car insurance policies. Based on that information, the appellants may not have actively promoted the insurance policies of HDFC Chubb. But in restricting their data base access only to HDFC Chubb, that too on real time basis and they enabled the latter to have access to a pool of new vehicle buyers who would obviously also need first time car in....