TaxTMI 
TaxTMI 
2026 (4) TMI 1591
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....s, challenging the common Order-in-Appeal [No.47/ST-Dlh/2019 dated 30.05.2019] confirming the demand of service tax under the Finance Act, 1994 on the amount of commission received by them from multi-level marketing company. 2. The issue relating to the chargeability of service tax on the amount of commission received from the multilevel companies has been dealt by the Tribunal in the following cases:- "1. Surendra Singh Rathore Vs. Commissioner, Jaipur [2014 (34) STR 147(Tri.-Delhi)] 2. Charanjeet Singh Khanuja Vs. Commissioner, Indore [2016 (41) STR 213 (Tri.-Delhi)] 3. Bhairu Dan Karwa & Others Vs. Commissioner, Jaipur [2016(10) TMI 1295-CESTAT-New Delhi] 4. Smt. Indira Devi Chhabra, Rekha Kothari, ....
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.... 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 assessees in these cases are distributors, who purchase the goods from Amway at the Distributors' Acquisition Price (DAP)) and sell the same in retail ....
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.... who on being sponsored by that Distributor are appointed by Amway as second level of distributors is, in our view, the activity of marketing or sale of the goods belonging to Amway and the commission received by the Distributor from Amway, which is linked to the performance of his sales group (group of the second level of distributors appointed on being sponsored by the Distributor) would have to be treated as consideration for Business Auxiliary Service of sales promotion provided to Amway. Therefore, service tax would be chargeable on the commission received by a Distributor from Amway on the products purchased by his sales group. However, in the impugned orders Service tax has been demanded on the gross amount of commission and no disti....
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.... in his statement dated 25.09.2017 that Herbalife has paid commission to associate as a percentage of sales done by the associates as well as by their downline members based in India. The commission amounts of various types, royalty, bonus, annual bonus was consideration received by the appellant from the company for having sponsored associates to join the Herbalife Organisation so as to increase the sale of their products and therefore, the activity falls under the definition of 'service' in terms of Section 65B(44) of the Act. Such services have been classified by various decisions during the pre negative period under "Business Auxiliary Service" as defined under section 65(105)(zzzb). The present case involves the post negative era where....
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....eriod 2012-2017 and show cause notice was issued on 11.04.2018, however the fact of the matter is that although the appellant was registered with the service tax department but they did not file ST-3 Returns. We find from the contents of the SCN that several letters were issued to the appellant, but they neither submitted any response nor cooperated with the Department in the investigation. It is only pursuant to the search of the residential-cum-office premises of the appellant and the records recovered that the service tax liability was ascertained. Such a conduct of the appellant supports the allegation of suppression with intent to evade payment of duty. The plea of bonafide belief has already been rejected by the Tribunal in Surinder S....
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....sh Chandra Vyas, Shri Ghanshyam Gabrani versus Commissioner of Central excise, Jaipur [2016 (10)TMI 1295 -CESTAT-New Delhi] the Bench had noticed that there was bonafide belief in the industry itself and therefore, the imposition of penalty would not be justified. We are also of the view that the issue of receipt of commission in cases of multi-level marketing whether taxable has been the subject matter of concern in large number of cases, which signifies that there was a bonafide belief in the mind of the assessee. The essential ingredients for invocation of the extended period of limitation and imposition of penalty being identical, we hold the issue of limitation in favour of the assessee and therefore, the duty liability shall be restri....