TaxTMI 
TaxTMI 
2018 (10) TMI 397
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....g Centre, Okhla Commercial Complex, Phase II, New Delhi - 110 020 (herein after referred to as the "company") and are getting commission in lieu of providing the said services but are not paying Service Tax on the commission received from the company. The services of commission/marketing agents are covered under the taxable category of "Business Auxiliary Services". This resulted in to initiation of enquiry under Section 14 of the Central Excise Act, 1944, as made applicable to Service Tax matters by virtue of Chapter V of the Finance Act, 1994. 2. In the course of enquiry and scrutiny of documents revealed that the appellant has entered in to an agreement with the company to act as distributor of the company's products. The company is a....
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.... of the company. It also appear that the distributor also provides the services of evaluation of prospective customers/distributors and introduction of the same to the company, who in turn also cause promotion or marketing of sale of goods produced or provided by the company. 4. It appear to Revenue that the appellant is liable to pay service tax on the commission received to the tune of Rs. 67,52,975/- for the extended period 2003-2004 to 2007-2008. Accordingly show cause notice was issued demanding service tax of Rs. 6,97,165/- + education cess etc. and further penalty was proposed. 5. The show cause notice was adjudicated on contest confirming the proposed demand and further penalty was imposed under Section 77 (1a) readwith Sectio....
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....r provided by or belonging to the client (Amway), as the sale of the goods purchased by the Distributors from Amway is not the sale of the goods belonging to their client - Amway. Once the Amway products have been purchased by a Distributor from Amway, those products cease to belong to Amway, but belong to the Distributor and sale of these goods by the Distributor would not constitute service to Amway. For the same reason, any incentive or commission received by a Distributor from Amway for buying certain quantum of goods from Amway during a month can not be treated as the consideration received for promotion or marketing or sale of the goods produced by or provided by or belonging to the client, more so, as this commission is not linked to....
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.... the volume of purchases of Amway products made by his sales group i.e. group of second level of Distributors appointed by Amway on being sponsored by the Distributor. For quantifying the Service tax demand on the commission received from Amway on the volume of purchase made by the distributors sponsored /enrolled by a particular distributor i.e. the Distributor's sales group, these matters would have to be remanded to the Original Adjudicating Authority. 14. Another objection raised by the appellants in Appeals Nos. ST/138 and 139/2009, ST/406/2010, ST/522 to 525/2010, ST/257, 259, 433, 473, 502, 580, 1123, 1383, 1781 & 1802/2011, ST/56, 86, 126, 645/2012 and ST/1723-1724, 2337 and 2810/2012 and the respondents in Appeals Nos. ST/851 to....
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....son and in this group of cases, the Distributors have promoted the sale/marketing of branded products. This plea of the Department is not correct, as in these cases the distributors are engaged in promoting sales/marketing of the products of Amway and they are not marketing or promoting any taxable service which is branded and the brand name belongs to another person. Marketing or sale promotion of branded products by a person/ commission agent does not amount to providing branded service by him and hence, marketing or sales promotion of a branded product does not come under the exclusion category as mentioned in the proviso to Notification No. 6/05-S.T. In this group of cases, the eligibility of the Distributors (assessees) for the exempti....
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....ervice" under Section 65(105)(zzb) read with Section 65(19) of the Finance Act, 1994. When on the issue involved in this group of cases, there were two views in the Department itself, it cannot be said that on the question as to whether the activity of the assessees was taxable under Section 65(105)(zzb) read with Section 65(19) of the Finance Act, 1994, there was no scope for doubt. As held by the Apex Court in the case of Continental Foundation Joint Venture v. CCE, Chandigarh reported in 2007 (216) E.L.T. 177 (S.C.) when there is scope for doubt in the mind of an assessee on a particular issue, the longer limitation period, under proviso to Section 11A(1)cannot be invoked and in our view, the ratio of this judgment of the Apex Court is a....