TaxTMI 
TaxTMI 
2024 (5) TMI 564
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....coal for which it had been receiving the commission of 5% in lieu of services provided by them to CIL, but they are not discharging their service tax liability under the category of BAS as defined under section 65 (19) read with Section 65 (105)(zzb). 3. As per Coal Distribution Policy issued by the Ministry of Coal vide OM dated 18.10.2007, the relevant clauses are set out below: "4.1 "The earmarked Quantity would be distributed through agencies notified by the State Governments. These agencies could be State Govt. Agencies/ Central Govt Agencies (NCCF / National Small Scale Industries Corporation (NSIC) etc.) or industries associations, as the State Govt. may deem appropriate. The agency so notified will continue to distribute coal until the State Govt. chooses to de-notify it. 4.2 The Agency/association so notified by the State Govt would be required to enter into Fuel Supply Agreement (FSA) with coal company to be designated by the Coal India Ltd The FSA will continue to remain in force till either the State Govt denotifies the agency/association or CIL shifts the obligation to some other coal company due to production, transportation, logistics etc. In the....
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....the proviso to section 73 (i) along with interest and penalty under the Finance Act, 1994. On adjudication, the impugned order confirming the demand was passed. Being aggrieved the appellant has preferred the appeal before this Tribunal. 6. We have heard learned counsel for the appellant and the learned authorised representative appearing for the department and perused the records. 7. Learned counsel for the appellant submitted that the arrangement between the appellant and the coal companies was for purchase of coal and resale to the coal consumers. The appellant is not acting as an agent of the coal companies and is not providing the service of promotion or marketing of sale of goods purchased by the coal companies. The relationship between the appellant and the CIL was on principal-to-principal basis, as they are paying the entire coal price to the coal companies on its own account before the supply. Learned counsel further submitted that invoices annexed with the memorandum of appeal clearly show that the appellant had paid sales tax/VAT on the amounts on which service tax is being levied. Learned counsel for the appellant has relied on the decision, enunciating the princ....
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....heir dealers. The revenue took the view that services rendered by the appellant to MGL are in relation to marketing of the goods of MGL and, therefore, constitutes service under BAS. Considering whether the transaction is one of sale or would constitutes service, the Tribunal observed as under: "11. As per the said provisions, the service provider provides service to his client for märketing 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....
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....e also paying VAT on their sales price to their customers. This clearly evidences that the AR's arguments that sale is not taking place between appellants and OMCs and also it is a paper transaction is incorrect and not supported by any evidence on record." 13. Merely because the nomenclature in the coal policy refers to 'Agency' does not mean that the appellant is selling coal to the coal consumers on behalf of the coal companies as agent and the transaction is one of principal and agent. In this context, the Apex Court in Bhopal Sugar Industry Limited vs. STO [(1977) 3 SCC 147] has observed as under: " 6. It is well settled that while interpreting the terms of the agreement, the court has to look to the substance rather than the form of it. The mere fact that the word ' agent' or 'agency' is used or the words 'buyer' and 'seller' are used to describe the status of the parties concerned is not sufficient to lead to the irresistible reference that the parties did in fact intend that the said status would be conferred. Thus, the mere formal description of a person as an agent of buyer is not conclusive, unless the context shows that the parties clearly intended to treat ....
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.... which the dealer operated the transactions effected by it must clearly be regarded as sales. Also the decision of Supreme Court in case of Bhopal Sugar Industry Limited where the principle for determining the agent/ principal relationship, it was observed: "....the essence of the matter is that in a contract of sale, title to the property passes on to the buyer on delivery of the goods for a price paid or promised. Once this happens, the buyer becomes the owner of the property and the seller has no vestige of title left in the property. The concept of a sale has, however, undergone a revolutionary change, having regard to the complexities of the modern times and the expanding needs of the society, which has made a departure from the doctrine of laissez faire including a transaction within the fold by virtue of an agreement, impose a folo of a sale even though the seller may by virtue of an agreement impose a number of restrictions on the buyer, e.g., fixation of price submission of accounts, selling in a particular area or territory and so on. These restrictions per se would not convert a contract of sale into one of agency, because in spite of these restrictions the tran....
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.........It is not that the stamp vendor collects the stamp papers from the Government, sells them to the retail customers and then deposits the sale proceeds with the Government less the discount. The liability of the stamp vendor to pay the price less the discount is not dependent upon or contingent upon sale or the stamp papers by the licensed vendor. The licensed vendor would not be entitled to get any compensation or refund of the price if these tamp papers were to be lost or destroyed." 17. To appreciate whether the appellant is providing the service of promotion or marketing or sale of goods produced by the coal companies, the provisions of section 65(19) of the Finance Act, 1994, defining "Business Auxiliary Service" is set out below: "Business Auxiliary Service" means any service in relation to, (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or" 18. Under sub clause (i) of section 65(19) promotion, marketing or selling the goods of the client is taxable as business auxiliary service, only if the service provider is acting as an age....