TaxTMI 
TaxTMI 
2019 (6) TMI 566
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....some dealers to market the product on their behalf and collect the sale proceeds for them for which an amount of Rs. 505/- for bulk pack of 1500 Badshah Khaini pouches and Rs. 1000/- for bulk pack of 3000 Badshah Khaini pouches was charged by them. The activity rendered by the appellant was alleged to fall under the scope of 'Support Service of Business or Commerce' as defined under Section 65(104c) of the Finance Act, 1994 and the consideration received thereof is chargeable to Service Tax. On the basis of statements and further investigation, it was alleged that the appellant had collected total amount of Rs. 6,17,07,457/- involving Service Tax of Rs. 70,13,483/-. Further, it is alleged that they have also collected an amount of Rs. 15,20,000/- as consideration towards the provision of such service to one M/s Rajendra Trading Company, on which Service Tax amount involved was Rs. 1,41,940/-, but not paid the Service Tax, which was proposed to be recovered from them. On adjudication, the total demand of Rs. 71,55,424/- was confirmed with interest and penalty and the amounts paid by the Appellant has been appropriated. Hence, the present appeal. 3. At the outset, the learned Advoc....
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....rvice Tax under 'Support Service of Business or Commerce'. Further, he has submitted that there are inherent contradictions in the findings of the Commissioner, therefore, the order is liable to be set aside. Further, he has submitted that the demand notice was issued to them on 5.9.2011 for the period April, 2007 to October, 2009 hence barred by limitation. 4. Per contra, learned AR for the Revenue has submitted that during the course of investigation by the Income Tax authorities, it was found that the appellant had unaccounted income of Rs. 42.02 crores, as disclosed in the statements of Shri Rajesh Omprakash Malpani, Director. Further statements recorded by the Income Tax authorities and the statements recorded subsequently by the Central Excise Department revealed that the appellant had provided market support service to dealers and the consideration amount was collected in cash and it was not accounted in their books of accounts, therefore, no written agreement was there in this regard. The amount collected as per non-competence agreement for the product Gai Chhap Jarda is Rs. 15.02 lakhs and for the product Badshah Khaini is around Rs. 6.07 cores. It is his contention that....
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....t, since both theses amounts have been received as noncompetition fee, therefore, the same cannot be classified under the taxable category of Support Service of Business or Commerce. The Revenue, in addition to the argument that non-competition fees chargeable to Service Tax under taxable category of Support Service of Business or Commerce, has also contended that the amounts collected from the dealers/retailers of the product 'Badshah Khaini, are in support of the business by way of providing necessary marketing infrastructural facility. 7. We find that the defense put up by the appellant before us in their grounds of appeal is that the amount collected by the appellant from M/s Rajendra Trading Company as well as from other dealers of Badshah Khaini are in the nature of fees relating to discourage of competition in promoting the sales of the said dealers/retailers. It is the contention of the appellant that such fees cannot be considered as consideration towards rendering Support Service of Business or Commerce. We find that this Tribunal in Jamna Auto Industries' case (supra) has considered the issue in similar circumstance and observed as below: - "4. After having carefull....
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....nufacturing, marketing, selling, commercializing, distribution and promotion of automotive suspension systems. The appellant is one of the large suppliers of tapered leaf and parabolic springs to Tata Motors Ltd. On the other hand, M/s. JSSL is also engaged in the same business/commercial activities and it is also on record that JSSL is a wholly owned subsidiary of the appellant, M/s. Jamna Auto Industries Ltd. (JAIL). 5. Considering above discussion, there cannot be any doubt that the appellant's action and activity of 'entering into non-compete agreement with JSSL' is nothing but a service covered by 'support service of business and commerce' as defined under Section 65(104c) read with Section 65(105) of Finance Act, 1994 and therefore, the consideration received for the said services is accordingly taxable. Consequently, the impugned order is sustained and the appeal dismissed as without merit. Cross-objections also stand disposed of accordingly." 8. We do not find any reason to deviate from the aforesaid findings of the Tribunal. Besides, the Commissioner while recording the opinion that the services rendered by the appellant who are having necessary infrastructure facilit....