AI Drafter 
TaxTMI 
TaxTMI 
2023 (10) TMI 353
X X X X Extracts X X X X
X X X X Extracts X X X X
....ness Auxiliary Service'. In appeal No. ST/11773/2016 apart from the above common issue in all the appeals, one more issue is involved i.e. whether the appellant is liable to pay service tax on the GTA service availed in respect of goods actually exported. 2. Shri H.D. Dave, Learned Counsel appearing on behalf of the appellant submits that on the identical facts this Tribunal has passed various judgments that merely by mentioning commission in the sales invoices. It does not amount to commission chargeable to service tax, whereas, the same is sales discount, therefore, the same is not chargeable to Service Tax. As regard the service tax demand on GTA in respect of appeal No.ST/11773/2016, he submits that since the GTA service was used for export of goods, the said service even though taxable at the initial stage of availing the service but used for export of goods and eligible for exemption under Notifications 18/2009-ST & 31/2012-ST therefore, the demand is not sustainable on this ground. 2.1 Without prejudice he further submits that the demand was raised by invoking extended period. But since the appellant have been declaring commission in the sales invoices which is meant f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s, 1994. To understand the transactions, we have perused the invoice, some sample export invoices are scanned below: From the above sample invoices, it can be seen that the invoice was raised to the buyer of the goods and in that invoice the appellant have deducted 10%/12.5% showing it as a commission. 4.1 In our considered view, if any amount in the sale invoice is deducted by whatever name, the same is nothing but discount given during the course of sale of goods. In the present transaction only appellant being a seller of the goods and foreign buyer of the goods are involved. Therefore, relationship between the appellant and the foreign buyer is of seller and buyer of the goods and the transaction is purely of sale of goods. Even, though the word 'commission' is mentioned in invoice and the same was deducted from the sale price, it is nothing but extended the discount to the buyer. The commission shall be chargeable to the Service Tax only in case, if there is a third party who has independently provided the commission agent service in relation to sales promotion and related service. In the present case no independent sales commission agent is involved. Therefore, even tho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se, there is absolutely no evidence that this 11% is paid to some third person as commission. There is no contract of commission agent service with any of the commission agent, there is no person to whom payment of commission was made therefore, it is clear that no service provider i.e. foreign commission agent exists in the present case and no service was provided by any person to the appellant. In the absence of any provision of service, no service tax can be demanded. The trade discount even though in the name of commission agent was given by the appellant to the foreign buyer, by any stretch of imagination cannot be considered as commission paid towards commission agent service, hence cannot be taxable. This issue has been considered time and again by this Tribunal. In the case of Duflon Industries Pvt. Limited v. CCE, Raigad (supra) and the Tribunal held as under : "6. The entire issue revolves around the fact whether clearances effected by appellant on goods which exported by them to DEL is of actual sale or sale based on commission 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 commissio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (24) G.S.T.L. 569 (Tri. - Del.), identical issue was decided wherein the HPCL, under an agreement for sale to retail customer purchased CNG from Indraprasth Gas Limited, the HPCL received consideration. The Tribunal held that the said consideration is in the nature of discount as agreement between HPCL and IGL is not on principal to agent basis but on principal to principal basis therefore, HPCL is not liable to service tax under the head of Business Auxiliary Service. In the case of Prabhakar Marotrao Thaokar& Sons v. CCE, Nagpur - 2019 (20) G.S.T.L. 294 (Tri. - Mumbai), the department raised demand on discount given by manufacturer to the appellant who is a wholesale dealer while supplying goods for further distribution. The department alleged that such discount is basically sales commission and liable to service tax under the category of Business Auxiliary Service under Section 65(105) of Finance Act, 1994. The Coordinate Bench at Mumbai held that the transaction between appellant and wholesale dealer is sale on principal to principal basis. The discount passed on by the manufacturer cannot be construed as commission and same is not subject matter to levy of service tax. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nsidered the submissions made at length by both sides and perused the records. 6. The entire issue revolves around the fact whether clearances effected by appellant on goods which exported by them to DEL is of actual sale or sale based on commission 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 t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....td. (supra), wherein this Tribunal observed as under :- "11. As per the said provisions, the service provider provides service to his client for marketing or promotion of the goods to third party. In these cases, appellants themselves are buying goods from M/s. MGL. Therefore, the question of rendering the service to the client for marketing of the goods does not arise. We further find that MGL is discharging VAT/ST liability while selling the CNG to appellants. Although the RSP is fixed but it does not mean that the profit margin shall be constituted as commission for rendering the service. On examination, it is found that all the transactions shown by the appellants are done on principal to principal basis. Moreover, the appellants are selling these CNG on payment of VAT/ST to the buyers. There is no commission component that have been received by the appellants from M/s. MGL. FOR e.g., if the appellant is receiving goods from MGL at 100/- per kg. including VAT but these goods are sold by the appellant to customers on RSP fixed at Rs.102/- per kg., that does not mean that the appellants are receiving commission of Rs. 2/- from MGL. In fact the appellants are also paying ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rders are set aside. The appeals are allowed." • In the case of Prabhakar Marotrao Thaokar & Sons (supra) the Mumbai Tribunal has passed the following order: "4. On careful consideration of the submissions made by both the sides and on perusal of records. We find that as per the agreement particularly the following clause : "5. The Wholesale Distributor shall sale the goods at the price as determined by the Manufacturer. It shall not charge anything extra over and above the said price. The Manufacturers shall not be responsible for any loss of goods after it leaves the factory premises. Wholesale Distributor would be the owner of the goods once same are supplied to them by the manufacturer from the factory gate and the Wholesale Distributor shall take possession of the goods from the factory gate and shall transport the same to its godowns at its own expenses." It is observed from the above para that after supply of goods by the manufacturer the ownership of goods is transferred to the wholesale distributor who is the appellant here. The sales invoice raised by the manufacturer is scanned below : From the agreement coupled with the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in the knowledge of the department. The appellant being registered manufacturer with Central Excise having filed their regular return to the department, there is absolutely no suppression of fact of mis-declaration on the part of the appellant. 4.3 This is also the submission of the appellant that even if the so called commission is liable to Service Tax the said service tax was available as Cenvat credit to the appellant. Therefore, the present case is of revenue neutrality for this reason also extended period cannot be invoked as held in various judgments. we do agree with this proposition that if at all there is a service tax liability on the commission the appellant is not only entitled for Cenvat credit but also prima facie eligible for refund, as the said commission service is exclusively in respect of export of goods. For this reason also the demand for extend is not invokable. Accordingly, the demand of service tax on the commission as well as on GTA service is not sustainable also on the ground of limitation. As per our above discussion and finding, the impugned orders are not sustainable. 5. Hence, the impugned orders are set aside. Appeals are allowed with consequ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 41287 95 250.00 40.00 40997.95 Exch Bale 1898205 BINDAL EXPORTS PVT LTD. Autod Signatory Document 2 232 Exporter MIS BINDAL EXPORTS PVT. LTD., 270-BINDAL HOUSE, SURAT KADODARA ROAD, KUMBHARIA, SURAT-394 210 (INDIA) TEL:91231-2640700/01/02/03 FAX : 2640705 Consignee MS. SAMITAH TRADING CO. P.O.BOX 3364, BUR DUBAI U.A.E PROFORMA INVOICE Invoice No. BE/06/11-12 SC No & Dt Buyer (if other than consignee) Date: 28.04.20111 TEL: 0505187195 FAX: 3550203. Pro Carriage by Place of Receipt by Pre Carrier CIF JEDDAH Vessel Filight No. Port of Loading BY SEA JNPTANDIA Country of Origin of Goods INDIA Terms of delivery & payment D/A.150 DAYS FROM THE DATE OF B/L Port of discharge Marks&No./ Container No. Final Destination DUBAI JEDDAH No.& Kind of Description of Goods Country of Final Destination K.S.A. Quantity in Rate IN Amount in US$ CIF YARDS US$ JEDDAH JASMINE FASHIONS (TOTAL 72 CARTONS ONLY.) CARTON NOS 354 TO 425. DYED AND PTD FABRICS MADE FROM 100% POLYESTER FILAMENT YARN/TEXTURISED YARN WITH EMBROI....
X X X X Extracts X X X X
X X X X Extracts X X X X
....-2640700/01/02/03 FAX 2640705 Consignee Consignee M/S. ROYAL CROWN TRADING LLC, AL FAHIDI STREET, P.O.BOX NO.6784, BUR DUBAI, U.A.E. TEL: 3535150. Pre Camiage by VesselFight No Pon of discharge PROFORMA INVOICE Invoice No. BE/85/10-11 SC No & D Duyer (if other than consignee) INDIA Country of Origin of Goods Terms of delivery & payment CIF JEDDAH DIA 150 DAYS FROM THE DATE OF BIL Place of Receipt by Pre Carrier Port of Loading BY SEA JNPTANDIA Final Destination DUBAI JEDDAH Marks&No / No & Kind of Pkg Description of Goods Container No DUBAI IN TRANSIT (TOTAL 63 CARTONS ONLY.) Date 23.09.2010 Country of Final Destination, K.S.A Quantity in Re IN YARDS US$ Amount in USS CIF JEDDAH CARTON NOS 4552 TO 4614. DYED & PRINTED FABRICS FABRICS MADE FROM 100% POLYESTER FILAMENT YARN/TEXTURISED YARN POLY X POLY DYED AND PRINTED DRESS MATERIALS 5281.00 1.05 74713.65 WE ARE EXPORTING THE GOODS IN DISCHARGE OF EXPORT OBLIGATION AGAINST EPCG LIC NO $230002898/3/11/00 DT 27.03.2008 ISSUED TO M/S. SHREE SIDDHI VINAYAK SAREE PVT LTD, P....
X X X X Extracts X X X X
X X X X Extracts X X X X
....886.25 AD. Code :0202995 Bank a/c No: : 28/02/2011 DAK CH 20.00 1.8.5. Code: DIVOICE DETAILS Invoice 1/2 Itv.val :2355137.50 IKR 45450.00 D&D FOB Val +2183886.35 EVR Lav.to. LE/XP/129/2010-1 16/01/2011 Lat. of con 1 BCW Pour inv) D Bp Contract Mo: Buchange rata Insurance :1.00 (160-44.750 (IR) Carracy 2.00 Freight: 1760 atacques A.0 11.30 USD Other Daductions:0.00 Packing Charges: Amount 8.00 95.00 0.00 1329. 0.00 0.00 Period of Payment: 180 ature of payment.DA auyar Nana Address M/S STAR GEGRAL TRADING LL C. MAI ROAD, DAERA P.0.90% 42459 Document 5 KMI EXPORTS 42, 1ST FLOOR, ASHIRWAD IND.CO-OP SOC LTD. BHESTAN, SURAT/ GUJARAT. TEL NO 0091 (261) (0) 9601651156 FAX: 2914226 Consignee MS. ALDEYAA SPARE PARTS DEERA FISH RIA AL QAIZI BULDING OFFICE #304. DUBAI UAE PH: 2711728 Pre-Camage by VesselFight No. BY SEA Port of Discharge DUBAI Maria & Noa Container No. VOICE Invoice No & Dala RAI Code No LE/EXP/129/2010-11 Dt. 16.03.2011 E Code No. 5205014059 Buyer's Orcer No & Date ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as given in the Castes autisticated Shipping Bill 100% POLYESTER FILAMENT YARN/TEXTURISED YARN, WITH OR WITHOUT EMBROIDERY AND/OR WITH OR WITHOUT METALISED YARN 1 of Lading/Post Poul Receipt/Airway Bill o Destination of goods Country Name: Bill Amount CIF/CAP/POB in 101 Preight Amount as per B of Lading/ Preight DUBAI Insurance Amounts per inaumance Company's Bill/receip GLAMEM11030683 23-03-11 718/1 Date 1131 1341 Whether the Expert is in Adel Indian Rupees Presly Convertible Currency US 43023.50 45.49 R. 238495.0 FBC. 48450.00 ocol US$. 95.00 44.75 Re. 4251.00 USB 0.00 0.00 0.00 381307 [CF] 18] Dtef Expert Reletion of Report Press ADVANCE PAYMENT 09.02.2011 17) No. Date & Catagory of Duty Free Licence/imprest License if shy applicable ve further declare that the aforesaid particulars are rect (copy of invoice. relevant to these export and ca attestad EP.Copy of relevant shipping Signature of the Exporter Name in Block Later Designation Full Official address Pul Realdential addres Authorised Foreign Exchange Dealer Code No. Allotted to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....2010 tevoice No: 61 Time of Removal 1955 hang we PM Thanker or Siris. FLA/ECG No: AADFG 5605 LXM 001 Name of Excisable Goode BRANDED CHEWING TOBACCO Chapter sub-head 2400 9910 Autvanicatad For GM. Thaokar & Co. -28- PARTNER PARTICULARS AMOUNT Ra P₂ Description and Focution of Goods SARVOTKRUST NAGPURI JARDA gr. In each Pudi 50 Pudies on Puda Pudas one Bag1.0 2 Number & Description of Packages Totalaga 35 Pudies 0 Pudes 3400 Na B 3 Total Quantity of goods KOL. 1890.0 4 Tour Wholesale Value RB 150415 De-Eusand 44188040 (Under Sec A of C. Ex Act 1944) Pudies.UK 5 AJ Value as per MFP Rs. Q Rs. Per Thousand B) Abelment 55% Re (Under Sex 4A of C Ex. Act 1044) Pudies Kgs. 6. Trade Discount RE 47.50 •Thousand Pudies (-) 73444 77573730 70905570 Page of Cuty C 75%-> b. £ Duty 8056- N.C.C.D 196- Ad Duty Serdivage 8810 Total In Words Cenia Esa Duty Paid under compungid levy chama under section A of C Esc read with Hecaton No. 11/2010-Cola Case NT Caty the 27 Febuary 2010 30165AP as ....