TaxTMI 
TaxTMI 
2023 (12) TMI 180
X X X X Extracts X X X X
X X X X Extracts X X X X
....gh its distributors. In direct selling, instead of middlemen, the sale was made directly to customer through a network of people by involving many people who sold a small amount of volumes each, which results in a huge volume for the entire network. Any person who was interested in joining the business of "Amway" has to become its distributor and this new person has to be sponsored by the existing distributor. Amway and its distributors have a binding contractual relationship as per terms and conditions laid down in the Amway Distributor application form, Amway Sales and Marketing plan, Amway Rules of conduct and other literatures. Each distributor was required to present/market Amway products and the Amway Sales & Marketing Plan to all the prospective distributors and each distributor was required to do merchandising and sponsoring activity. Merchandising was sale of Amway product to customers and sponsoring was finding and perusing new person as prospective distributor for Amway and training them to demonstrate the Amway products. In this way, it becomes a large network of people thereby resulting in the growth of the business of Amway manifold. To attract more and more persons t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed in those cases which were remanded by the Tribunal vide order dated 09.06.2015. 9. We have considered the submissions of both the parties and perusal of the material on record and also the judgment of the Tribunal in the case of Paramjit Kaur & others vide which the Tribunal disposed of 83 appeals by remanding the matter to original authority for de-novo adjudication. It is pertinent to reproduce the relevant findings of the decisions of the Tribunal which is mentioned as under: 9. The appellants in the appeals ST/138 and 139/2009, ST/406/2010, ST/522 to 525, 257, 259, 433,473,502,580,1123,1383,1781 & 1802/2011, ST/56, 86, 126, 645/2012 and ST/1723-1724, 2337 and 2810/2012 and the respondents in the appeals nos. ST/851 to 854, 863, 864, 865, 866, 867, 868, 869, 870 and 878/2012 filed by the Revenue are distributors of Amway India Enterprises Pvt. Ltd. Amway operate their business of selling of their products under a Business Plan called Multi Level Marketing. As per the Business Starter Guide of Amway India Enterprises Pvt. Ltd. placed on record, they appoint Distributors, who purchase their products and sell the same at the price not exceeding the MRP fixed by the A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d that for the purposes of this sub-clause, service in relation to promotion or marketing of service provided by the clientincludes any service provided in relation to promotion or marketing of games of chance, organized, conducted or promoted by the client, in whatever form or by whatever name called, whether or not conducted online, including lottery, lotto, bingo;] (iii) Any customer care service provided on behalf of the client; or (iv) Procurement of goods or services, which are inputs for the client; or x x x x x x x x x x x x x x x x x x x x x x x x" 12. According to the Department, the activity of the assessees is promotion or marketing or sale of the goods produced or provided by or belonging to the client.In our view, the activity which is covered under Section 19(i) is in relation to the promotion or marketing or sale of the goods produced by the client or provided by the client or belonging to the client. This expression, in our view, would not cover the sale of the goods by a person, which belong to him, as the activity of the promotion or marketing or sale of the goods by a person belonging to him would not constitute service. The a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion has been made between the commission earned by a Distributor from Amway based on his own volume of purchase from Amway and the commission earned by him on the basis of the volume of purchases of Amway products made by his sales group i.e. group of second level of Distributors appointed by Amway on being sponsored by the Distributor. For quantifying the service tax demand on the commission received from Amway on the volume of purchase made by the distributors sponsored /enrolled by a particular distributor i.e. the Distributors sales group, these matters would have to be remanded to the Original Adjudicating Authority. 14. Another objection raised by the appellants in appeals nos. ST/138 and 139/2009, ST/406/2010, ST/522 to 525/2010, ST/257,259, 433,473,502,580,1123,1383,1781 & 1802/2011, ST/56, 86, 126, 645/2012 and ST/1723-1724, 2337 and 2810/2012 and the respondents in appeals nos. ST/851 to 854, 863, 864, 865, 866, 867, 868, 869, 870 and 878/2012 is that the assesses are individuals and during the period till 30.04.2006, service tax was chargeable only on the services provided to a client by a commercial concern in relation to Business Auxiliary Service and th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... payment of service tax. The Departments contention, on the other hand, is that the assesses neither obtained service tax registration nor did they declare their activities to the jurisdictional service tax authorities nor did they file ST-3 Return and, therefore, they are guilty of suppression of relevant facts and deliberate violation of the provisions of Finance Act, 1994 and of the Rules made thereunder with intent to evade payment of tax. On considering the rival submissions on this point, we are of the view merely because the assesses did not apply for Service Tax Registration or did not file ST-3 Returns or did not declare their activities to the jurisdictional central excise authorities, it cannot be inferred that this was a wilful act with intent to evade payment of service tax. We also take notice of the fact that in respect of appeals filed by the Revenue, the Commissioner (Appeals) after analyzing the activities of the assesses had taken the view that the same is not covered by the definition of Business Auxiliary Serviceunder Section 65(105) (zzb) read with Section 65(19) of the Finance Act, 1994. When on the issue involved in this group of cases, there were two views ....