2023 (8) TMI 1150

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....der Section 73 of the Finance Act, 1994 by invoking the extended period of limitation along with interest under Section 75 of the Finance Act, 1994 and further penalty under Section 76, 77 and 78 of the Act be not imposed. It was alleged to recover the aforesaid service tax on the total amount of commission of Rs.7,85,55,876.00 (Period 01.04.2005 to 31.03.2010) and discount of Rs.1,97,23,027.00 (Period 01.04.2008 to 31.03.2010) alleged to have been received by the appellant on the ground that the appellant "appears" to have provided services to "BSNL" which fell under the definition of "Business Auxiliary Service" as defined under Section 65 (19) of the Finance Act, 1994. 3. The appellant filed detailed reply dated 29.07.2011 before the Commissioner, Central Excise Commissionerate, Chandigarh-II, Chandigarh to the said notice denying their liability to the action as proposed. 4. After following due process, the Ld. Commissioner has passed the impugned order dated 15.09.2011 confirming the following demands:- "i) I confirm the demand of service tax amounting to Rs.1,15,08,277.00 (Service Tax Rs.1,11,99,118.00; Edu.Cess Rs.2,23,982.00 & H&S Edu. Cess Rs.85,177.00) agai....

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....n by the appellant in support of their submissions:- i. Final Order No. 60094/2023 dated 18.04.2023 in the matter of M/s Lovely Traders Versus CCE & ST, Rohtak. ii. Final Order No's. 21144-21158/2018 dated 16.08.2018 in the matter of M/s Devangi Communications, Devangi Complex Jail Circle, Shimoga & Others. iii. Commissioner of Central Excise, Meerut Versus Moradabad Gas Service [2013 (31) S.T.R. 308 (Tri- Del)] iv. J.KEnterprises Versus Principal Commissioner, Central Excise, Alwar [2023 (70)G.S.T.L.297/3 Centax 53 (Tri- Del)] v. CCE, Lucknow vs. Chotey Lal RadheyShyam: 2018 (8) GSTL 225 (All.) vi. Goyal Automobiles vs. CCE, Chandigarh: 2016 (43) STR 268 (Tri.-Del) vii. Omer Agencies (Hutch) vs. CCE, Allahabad: 2015 (40) STR 1135 (Tri.-Del) viii Karakattu Communication vs. CCE: 2007 (8) STR 164 (Tri.) affirmed by Hon'ble High Court of Kerala as reported in 2016 (45) STR J209 (Ker.) ix. Daya Shankar Kailash Chand vs. CCE, Lucknow: 2013 (30) STR 428 (Tri.-Del) affirmed by Hon'ble High Court of Allahabad as reported in 2014 (34) STR J99 (All.) x GR Movers vs. CCE: 2013 (30) STR 634 (....

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....(SC)]. iv. M/s Tamilnadu Housing Board Vs. Collector of Central Excise, Madras [1994 (74) ELT 9 (SC)]. 10. Ld. Counsel further submits that the demand of interest and imposition of penalty are neither justified nor warranted in view of the facts and circumstances of the present case because there was no malafide intention on the part of the appellant. 11. On the other hand, the Ld. AR for the Revenue defended the impugned order and submitted that on perusal of the agreement and the Sales and Distribution Policy under which the appellant was operating as franchisee/agent of BSNL reveals that the procedure relating to sale and accounting has been decided by the BSNL for their franchisees and that the appellant as franchisee/agent are not carrying out the sale of products/services as per the terms laid down by BSNL in the agreement and the Policy. He further submitted that ultimate service in respect of the products/services is given to the customers in the name of BSNL only. Necessary activation of the services and acknowledgement to the customers is also done by BSNL after due commercial verification which clearly shows that all sales/services are done by the appellan....

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....lt its foundation on the assumption that appellants render "business auxiliary service" in relation to SIM cards and hence liable to tax on the commission earned by them. At the same time, the impugned order has considered the commission received as discount on sale of recharge and "top-up" coupons as not liable to tax following the decision of the Tribunal in Commissioner of Central Excise, Meerut v. Moradabad Gas Service [2013 (31) S.T.R. 308 (Tri.-Del.)]. Our attention has also been drawn to the decisions of this Tribunal in the case of GR Movers v. Commissioner of Central Excise, Lucknow [2013 (30) S.T.R. 634 (Tri.-Del.)] and Daya Shankar Kailash Chand v. Commissioner of Central Excise & Service Tax, Lucknow [2013 (30) S.T.R. 428 (Tri.-Del.)]. The Hon'ble High Court of Allahabad has upheld these two decisions. 7. We find that this contrived distinction attempted in the impugned order by the first appellate authority does not conform to logic or to any commercial distinction. On the contrary, the three decisions cited above are clear in laying down the principle that the user of the telephony services is the service recipient and tax liability on the gross value charged....