TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 361
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....efore said commission amount is chargeable to service tax under the head "Business Auxiliary Service" in terms of Section 65(19) of the Finance Act 1994 and is taxable service vide Section 65(105)(zzb) of the Finance Act,1994 read with Section 66A (19) of the Finance Act, 1994 read with section 66A of the said Act under Reverse Charge Mechanism. Accordingly Show Cause Notice was issued and the adjudicating authority confirmed the demand along with penalty and interest. Therefore, the appellant filed the present appeal. 2. Shri Willingdon Christian, Learned Counsel appearing on behalf of the Appellant submits that Appellant is not liable to pay the Service tax, as they had not received any service in India from any foreign Agent. As per the agreement with the foreign buyers, the Appellant was supposed to reduce the gross sale value by 10% as commission. The appellant have received 10% less from the gross sales price as per the purchase order placed by the foreign buyer. The entire demand of Service tax is based wholly on the amount of commission shown as deducted from the overall value shown as the sale price of the goods exported. There is only a reflection of the amount of commis....
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....n agent service. We find that firstly, there is no commission agent exist who provided the service for export trading of the goods exported by the appellant. When no service provider is in existence it cannot be said that the appellant have received the commission agent service. Secondly, it is also fact that the appellant have not paid the commission to any person in the foreign country. Therefore, in absence of any consideration paid for the alleged commission agent services no service tax can be demanded. In the export invoice the appellant have deducted an amount in the nomenclature of commission from the gross sale price thus, the deduction was passed on to the buyer of export goods which is nothing but a discount given to the Foreign Buyers of the goods. In the above facts we are of the view that neither any service provider exist nor was any consideration paid to any service provider. Therefore, the department's contention is baseless and not sustainable. This issue has come up time and again and the same was decided in the following judgments: * LAXMI EXPORTS - 2021 (44) GSTL 284 (T) "7.From the above invoice, Shipping Bill and Bank Certificate, it is seen that against ....
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....basis. If it is direct sale to DEL then appellant has case and if it is held that it is not direct sale, but the sale based on commission basis then appellant has no case. For this we have to examine the agreement dated 16-5-2001 entered between appellant and DEL. The agreement is enclosed to the appeal memorandum and on perusal of the same we find that the agreement sets out clauses about the sale of goods by appellant to DEL. The said agreement speaks of purchasing of various items from appellant by the said DEL and it also records that appellant shall allow flat deduction/commission of 8% on the invoice value to DEL. We perused the invoice raised by appellant to DEL and find that the invoice is for the sale of the goods and 8% commission is indicated as has been given on the total invoice value. It is also seen invoice value has been reduced by 8% shown as commission, is against the sale of the goods to DEL. We agree with the contentions raised by Learned Counsel that the purchaser of the goods cannot be considered as a "commission agent" as the deduction/commission is for the goods sold. There is nothing on record to show that the said DEL was appointed as "commission agent" fo....
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....e discount passed on by the manufacturer cannot be construed as commission and same is not subject matter to levy of service tax. In the present case also, identical nature of transaction involved therefore, applying the ratio of the above judgment, the commission deducted by the appellant in the present case in the invoice is nothing but a trade discount and same is not subjected to service tax." * Hindustan Petroleum Corporation- 2019 (24) GSTL 569(T) "6. We have also examined the terms of the agreement between the IGL and the appellant. At the outset, we note that similar set of facts in respect of appellant‟s own case in Mumbai and for IOCL with IGL has been a subject matter of decisions of this Tribunal. The said decisions relied upon by the appellant are relevant to decide the present case also. In the case of IOCL (supra), the Tribunal observed as under :- "7. On careful consideration of the submissions made by both the sides, we find that on identical set of facts and on the basis of the identical agreement, a case was booked against M/s. Bharat Petroleum Corpn. Ltd. (supra), wherein this Tribunal observed as under :- "11. As per the said provisions, the ser....
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....commission or omission of IOCL or its employees, personnel or representatives." 9. As per the agreement, the transaction done between the parties is on principal to principal basis. Therefore, relying on the decision of this Tribunal in the case of Bharat Petroleum Corpn. Ltd. (supra), we hold that the demands against the appellants are not sustainable under the category of "Business Auxiliary Service" for the amount received by the appellant as commission as all the transactions have been done between the appellant and IGL on principal to principal basis." 7. In the present case, the facts are almost identical. The transaction between IGL and the appellant are on principal to principal basis. The appellant has been prohibited from holding himself as an agent of IGL. The agreement categorically states that the same is on principal to principal basis. 8. Considering the ratio of the decisions of the Tribunal referred to above, we find that service tax liability under BAS cannot be sustained against the appellant. Accordingly, the impugned orders are set aside. The appeals are allowed. * Prabhakar Marotrao Thaokar& Sons- 2019 (20) GSTL 294 (T) 4. On careful consideration of....