TaxTMI 
TaxTMI 
2020 (10) TMI 730
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....ice tax and without paying the service tax. Thus, they appeared to have contravened provisions of Sections 68, 69 and 70 of the Finance Act, 1994. After investigation and procuring necessary details from the appellant, a show cause notice dated 17.10.2008 was issued demanding an amount of Rs. 52,82,725/- as service tax (including Education Cess) on the service charges received by them during the period 01.07.2003 to 31.03.2005 under the proviso to Section 73 of the Finance Act, 1994, invoking extended period of limitation. The Show Cause Notice also sought to demand interest under section 75 of the Finance Act, 1994 and impose penalties upon the appellant under Sections 76, 77 & 78 of the Finance Act, 1994. After following due process, the Ld. Commissioner, by the impugned order, has confirmed the demand and interest and imposed penalties as proposed. Aggrieved, this appeal is filed by the appellant. 4. Ld. Counsel for the appellant does not dispute that they had rendered services to the aforesaid companies and have received payments as indicated in the show cause notice. His argument is that the services which they have rendered are not classifiable as "Business Auxiliary Servi....
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.... per case as service charges on the secondary sales of our brands during the duration of this agreement. The said charges shall be subject to TDS at actual as applicable in force and review from time to time. The service charges shall be paid on submission of depot wise secondary sale duly authenticated by SWDL's Area Manager and the payment shall be made by 10th of every consecutive month. Over and above, the service charges payable to the promoter as per the above mentioned clause, no other form of remuneration or service charges shall be payable by SWDL to the Promoter. All expenses on account of offices, manpower, telephone, postage, incidental and all other forms of outgoings will be entirely to the Promoter's amount. All salaries, travel expenditure of executives, office maintenance, incidental expenses at APBCL, shall be paid promptly in time by the promoter for smooth operations of the business." 5. Ld. Counsel would submit that although their agreement is titled as "Agreement for Sales Promotion" in fact there cannot be any sales promotion because there is no open market for the product and there is only one customer viz; Andhra Pradesh Bevera....
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....78 of the Finance Act, 1994. 8. Ld. DR reiterates the findings of the adjudicating authority. He would submit that the agreements which the appellant had entered into various distilleries were for sales promotion and marketing. They were getting paid @ Rs. 8/- per case of the marketed product. Although there was only one buyer viz; M/s APBCL, there were several sellers, some of whom have employed the appellant as their sales promotion/marketing agent. Not only is the agreement meant for sales promotion, a bare perusal of the agreement would show that the pith and substance of the agreement is of sales promotion and marketing activity. In the course of sales promotion and marketing, the person who is marketing the products also liaisons with the customers in any such agreement and collects information regarding orders, etc. and sends the reports to the principal company. Therefore, there is no force in the argument of the appellant that they were not rendering the job of sales promotion and marketing, when their own agreements with their principals show that their job is one of the sales promoter and they are getting paid based on the quantity of goods sold. Therefore, the dem....
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....ts, etc. if any, shall also be followed up to our satisfaction. 3. The promoter shall place Excise duty paid indents with our unit to effect supplies. 4. Any promotional/marketing activities to be undertaken for these brands will have to be cleared by our marketing departments before implementation. 5. (a) Responsibility of secondary sales at various APBCL depots shall be entirely Promoter. (b) Manpower employed to promote these brands shall be on the Promoter's role and Shaw Wallace Distilleries Limited shall have no liability. (c) Liaison with APBCL will be Promoter's responsibility. (d) Inter depot stock transfer if any, will be to the Promoter's account subject to a maximum of Rs. 2.40 lacs per year. 6. The promoter shall send weekly/fortnightly/monthly reports to Shaw Wallace Distilleries Limited on all the activities carried out in the market, APBCL, Excise etc." (6) PAYMENTS: The promoter will ensure (i) To obtain payment from APBCL of pending bills within the stipulated time and forward the same to us immediately. (ii) To ascertain reasons and solve all matters pertaining to o....
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....ues along with bank pass book details to be furnished to SWDL on monthly basis. Undisbursed/unclaimed cheques shall be paid back to SWDL by the promoter. (10) GENERAL (i) The Promoter shall not undertake similar appointments with any others in the business of IMFL, Rum and Beer during the period of this agreement. (ii) The promoter shall keep the company informed about competitors' activities with regard to their products' pricing, packaging, promotions, sourcing etc. which can make an impact on SWDL's business. (iii) The promoter shall keep the company informed about the changes in his organisation promptly. (iv) The promoter shall not assign, delegate or otherwise deal with all the or any of your rights or obligations under this appointment without the Company's prior consent. (v) The Promoter shall not appoint any sub-agent without the company's prior consent. (vi) The Promoter must open separate bank account to meet the Sales Promotional activities expenses. Shaw Wallace Distilleries Limited shall send cheques only to that account and Shaw Wallace Distilleries Limited shall also monitor the transactions of the said ....