TaxTMI 
TaxTMI 
2020 (2) TMI 1255
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....00/- Penalty (Sec 78) Rs. 57,60, 376/- Rs. 1,09,04,383/- Rs. 1,45,86,741/- Issue Whether the Appellant is liable to pay Service Tax under the category of "Business Auxiliary Services" in respect of the support received from M/s Coca Cola India Pvt Ltd for undertaking Market Promotion of Beverages. 2.1 The appellants are engaged in the distribution and sale of non alcoholic beverages under the brand name of The Coca Cola Company (TCCC). They entered into Bottlers Agreement with TCCC wherein the appellant had been authorized to use the trade marks in connection with preparation, packing, distribution and sale of beverages in and throughout the specified territory. 2.2 They purchase major portion of the beverages from Amritsar Crown Caps Ltd (ACCPL), a 100% subsidiary of the Appellant. ACCPL has entered into Bottlers Agreement with TCCC wherein, it has been granted the right to prepare, package, distribute and sell beverage. ACCPL purchases concentrate required for manufacture of the finished products from Coca Cola India Pvt Ltd (CCIPL). 2.3 As per the agreement, the appellants are required to take steps for advertising, marketing and promoting the sale of beverages. In view....
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....llants and the Revenue have filed written submissions in the matter. 3.2 In her submissions, the learned advocate for the appellants submits that- * Issue involved in the matter is no longer and has been settled in their favour in following decisions: * Superior Drinks Pvt Ltd [2019 (6) TMI 272 -CESTAT Mumbai] * Narmada Drinks (P ) Ltd [2017 (5) GSTL 369 (T-Del)] * Narmada Drinks (P ) Ltd [2018 (6) TMI 899 CESTATDelhi] * Brindavan Bottlers Ltd [2019 (27) GSTL 354 (T-All)] * SMV Beverages Pvt Ltd [2018 (17) GST 284 (T-Mum)] * Nahar Inustrial Enterprises Ltd [2010 (19) STR 166 (P & H)] * Parker Markwel Industries Pvt Ltd [2019 (24) GSTL 42 (THyd)] * Datamani Technologies (India) Ltd [2017 (51) STR 145 (T-Mum)] * The decision of the Hon'ble Bombay High Court in case of Coca Cola India Pvt Ltd [2009 (15) STR 657 (Bom)] holding that that advertisement services were input services for the assessee and relied upon by the Commissioner in the impugned order is not applicable in the present case. * Promotion of the brand was not covered under the Business Auxiliary Service prior to 01.07.2010 as has been held in the following decisions: * Jetlite (India) Ltd [2011 (2....
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....the bottler agreement obligates promotion of beverages. * The concentrate can be used only to produce Beverage and not having an independent market, the demand can be increased only by promoting the sale of beverages. Concentrate is not a consumer product and is brought only by the bottlers. * The sales promotion done by the bottler is for the promotion of goods belonging to Coca Cola India and as such payment is made by Coca Cola for this activity. * As per clause 39 of the agreement it is clearly stated that bottler agreement do not create a Joint Venture (JV). * The amount received are shown as income in the accounts of appellant and not shown as expenses. * As per clause 7 of the Bottler agreement, trade mark is different from beverages. Clause fro Trade Mark are set in Portion III and that for preparation and packaging of beverages are in portion IV. * Different clauses of the agreement restrict sale and advertising/sales promotion activities of Beverage also. *  Decisions of SMV Beverages Pvt Ltd relied upon by the Appellant cannot be relied as the payment of excise duty cannot be criteria for sale. * Sale/ Transfer of Concentrate is not absolute but i....
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....ort to the arguments being advanced. There is no dispute that bottler is under obligation in terms of bottlers agreement with the Coca Cola USA to promote Beverage and the Brand. 4.4. Undisputedly the appellants purchase the concentrate from the Coca Cola India. Learned Authorized Representative after referring to various terms of agreement argues stating that "all these conditions reflect that concentrate is only transferred for use and not sold to the bottler." The fallacy in the arguments advanced is self evident if we refer to the definition of sale and purchase as per Section 2(h) of the Central Excise Act, 1944 as it existed then. The said definition has been made applicable to Chapter V of Finance Act, 1994 as per Section 65 (121) ibid. The relevant provisions are reproduced below: Section 2(h) of Central Excise Act, 1944 "sale" and "purchase", with their grammatical variations and cognate expressions, mean any transfer of the possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuable consideration; Section 65 (121) of Finance Act, 1994: words and expressions used but not defined in this C....
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....sioner in the impugned order and by the Authorized Representative has been distinguished by the Mumbai Bench in case of Superior Drinks stating as follows: "5.9 There cannot be more convoluted application of the decision of the High Court and stretching the provisions in an agreement for purpose of levy of tax. If the arguments of the Commissioner were to be accepted then in that case every manufacturer/ producer/ supplier of the goods who purchases and material/ inputs is promoting the sale of his input supplier. Since as the sale of his finished goods goes up automatically consumption of inputs will go up and accordingly he promotes the sale of input manufacturer/ supplier. In our view such an interpretation is neither logical or rational. Both input suppliers and the finished product manufacturer are independent business entity acting in the interest of their business. The issue before the High Court was vis a vis the admissibility of CENVAT Credit in respect of Advertisement services availed by the Coca Cola India as is evident from para 2 & 3 of order reproduced below: "2. The main question which is therefore, required to be considered, in the present Appeal, is whet....