TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 524
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....heads, namely, Mobile Scheme Discount/Accessories Scheme Discount/other discount from the mobile manufacturers or their distributors. Such incentives were received by the assessee for the purchase/sale of mobiles under Exchange/Festival/Special discount, quantitative off-take incentives and free product towards sale promotion of mobile phones from the manufacturers of suppliers of mobile phones. The period involved in the instant case is from 2009-10 to 2013-2014. 3. It appeared to the department that the assessee had received such "Incentive Income" from the mobile manufacturers or their distributors on the quantity of purchases/sales of mobile phone. It also appeared that the amount so received by the assessee was purely commission income under the various names as incentives. Thus, all such income received towards various sale promotional schemes of manufacturer, whether or not based on quantitative volume of the business is extra incentive for the efforts made by the assessee for additional purchases/sales which is also evident from the facts that the services related to sales promotion are provided and received against consideration in the form of such incentives. 4. It also....
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.... acting on behalf of another person- (i) Deals with goods or services or documents of title to such goods or services; or (ii) collects payment of sale price of such goods or services; or (iii) guarantees for collection or payment for such goods or services; or (iv) undertakes any activities relating to such sale or purchases of such goods or services; ..........." 5.1 Further, prior to 01-07-2012, only the services specified in clause (105) of Section 65 of the Finance Act, 1994, were liable to Service Tax under the charging Section 66. However, from 01-07-2012 onwards, all services, other than the services specified in the negative list under Section 66D or exempted otherwise, are taxable under Section 66B. The above service, i.c. "Business Auxiliary Service", as per Section 66B, is taxable service. 6. It appeared that the incentives were received from the manufacturers of the mobile handsets and their distributors on account of promotion and marketing of their product. Thus, it appeared that the said incomes were earned towards sale promotion and hence are taxable and chargeable under the service category of Business Auxiliary Service. The details of the taxable in....
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...., 1994 inasmuch as the assessee has failed to pay the Service Tax, including Education Cess and Secondary & Higher Secondary Education Cess, amounting to Rs. 2, 51 ,24,960/-; (ii) Section 69 of the Finance Act, 1994 read with Rule 4 of the Service Tax Rules, 1994 inasmuch as the assessee failed to take registration from the Department for the service provided by them under the Business Auxilian Service (Incentive Income); (iii) Section 70(1) & 70(2) of the Finance Act, 1994, as amended read with Rule 7 of the Service Tax Rules, 1994 inasmuch as the assessee has failed to self assess the Service Tax on the taxable I value received by them and to file proper ST-3 returns for the said Service Tax amount. 10. Thus, it appeared to the department that the assessee, by their acts and/or omission, have evaded the assessment of Tax, failed to disclose wholly and truly all the material facts required and suppressed the taxable service with the willful intention to evade payment of Service Tax and thereby, evaded the Service Tax. All these acts of contravention of the Finance Act, 1994 and the Rules made thereunder, on the part of the said assessee, appeared to have been committed by way....
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....r Section 66 read with Sections 65(105)(zzb) & 65(19) of the Chapter V of the Finance Act, 1994 or under Section 66B ibid. 14.2 That they are engaged in the trading in mobile handsets and it's earning incentives/discounts, etc. Since they are trading in the mobile handsets and its accessories, the person who is buying from them is not a client. Therefore, the incentives/discounts received from trading in goods, cannot be treated as "services". 14.3 That they are not providing any service; that they are not doing anything for promotion or marketing or sale of goods produced or provided by or belonging to the client; that they are trading for its own and any goods sold by them belong to them only, that they are not promoting or marking any services provided by the client; that they are not rendering any customer care services on behalf of the client; that they are not engaged in procurement of goods or service, which are inputs for their client; that they are not engaged in the business of production or processing of goods for, or on behalf of, the client; that they are not providing services on behalf of the client and everything is done by them on their own risk and account; that....
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.... COMMR. (APPEALS) * Order-in-Appeal No. RAJ-EXCUS-000-APP-262 TO 263-2017-18 dated 27.02.2018. 16. They also made further written submission vide letter dated 30.10.2023 emphasizing, inter alia that the amounts of discounts were being adjusted through debit and credit notes. The stocks were reflected in their books and therefore transactions were of outright purchase by them and same at discounted price discharged VAT etc. and was reflected in their VAT returns also. 17. Learned AR on the other hand emphasized that as noted by the Learned Commissioner in his order the incentive available was only on few models and not on others and normally it was in relation to the latest models and that scheme was meant to promote select models of Samsung brands and it was noteworthy that the scheme specifically mentioned the models which were excluded from the scheme. The fact that the scheme made preceded the actual sale is not disputed by the assessee. Thus, it was clear that the transactions which earned payouts or counted for discount or incentive by the assessee were not simple trading transactions involving buying and selling of mobile handsets. In reality, the transactions have result....