Custom, Excise & Service Tax Tribunal
Cce, Chandigarh vs Ganga Traders on 17 April, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
BENCH-DB
Service Tax Appeal No.ST/1293/2010-CU.[DB]
[Arising out of Order-in-Appeal No.62-63/ST/APPL/CHD-II/2010 dated 17.05.2010 passed by the Commissioner (Appeals), Central Excise, Chandigarh].
For approval and signature:
Honble Mrs.Archana Wadhwa, Member (Judicial)
1. Whether Press reporters may be allowed to see the No
order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the No
CESTAT (Procedure) Rules, 1982 for publication in
any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy Seen
of the Order?
4. Whether Order is to be circulated to the Departmental Yes
authorities?
__________________________________________________
CCE, Chandigarh Appellant
Vs.
Ganga Traders Respondent
Present for the Appellant : Shri Jayant Sahay, D.R.
Present for the Respondent: Shri S.K. Sarwal, Advocate
Coram:Honble Mrs. Archana Wadhwa, Member (Judicial)
Honble Mr. Rakesh Kumar, Member (Technical)
Date of Hearing/Decision: 17.04.2014
FINAL ORDER NO. 51836/2014 DATED: 17.04.2013
PER: ARCHANA WADHWA
Being aggrieved with the order passed by the Commissioner (Appeals), Revenue has filed the present appeal.
2. After hearing both the sides, we find that the respondent is authorised dealer of M/s. Punjab Alkalis and Chemicals Ltd. under a proper dealership agreement. The dispute is as to whether the respondent is to be considered as dealer or as Commission agent, in which case he is liable to pay service tax.
3. While allowing the respondents appeal, Commissioner (Appeals) has observed as under:-
4.2 I observe that the demand of service tax has been raised and confirmed on the grounds that the appellants have received an amount of Rs. 46,22,429/- from M/s PACL as commission/discount. The appellants vide their letter dated 10.05.2010 have submitted that their income was on account of discounts namely quantity discount, cash discount, rate difference discount etc. they also submitted the copies of. Some purchase account, Sales Account, Party Account in r/o customers and PACL, Bank account /Bank statement and a few purchase invoices and sale invoices raised by them, for the relevant period. On going through these records it is observed that the appellant first purchased the goods from PACL and then sold the same to the customers at the higher/ lower rates than the purchase prices. In a few cases where the sale price is lower than the purchase price, the appellant charge the difference from PACL as price RD (rate difference) and in case the sale price is higher than the purchase price the same is retained by them as profit. These documents indicate that the sale was no on behalf of PACL and the relation of service provider and service recipient between the appellant and PACL is not present in this case which is the basic requirement for charging service tax. I agree with the contention of the appellant that the major part of amount received by them from PACL was quantity discount based upon the quantity of goods purchased. Trade discount, quantity discounts are widely accepted trade practices.
In fact, it is evident from the documents/records submitted by the appellant No. 1 that he was engaged in sale and purchase of goods on his own behalf. He is not acting as an intermediary between the buyer and the PACL. Appellant No.1 is buying goods on his own account, and payments are being made by him to M/s APCL from his account; and it is he who is responsible for any payment default or any liability which may accrue during the sale of goods vis-a vis his buyers. Therefore, it transpires that there exists a relationship of buyer and seller between PACL and the appellant No.1. It is further corroborated from the copies of VAT Returns filed by the appellant that VAT is being paid by the appellant on the sale of goods. Had he been acting as commission agent, he need not have paid VAT, and sale should have been effected directly by the supplier i.e. PACL to the buyer. The appellant is raising his own invoices after adding his profit to the purchase price and collecting payment from the buyer as per sale price and then makes payment to M/s PACL. The evidence submitted by the appellant No.1 are sufficient to establish that there existed a relationship of buyer and seller between appellant and M/s PACL and not that of service receiver and service provider.
From the above I observe that the appellant was not engaged in purchase or sale of goods belonging to/ on behalf of the client (PACL). As such the appellants are not liable to pay service tax on the sale and purchase of goods as held by the Honble CESTAT in the case of South East Corpn. Vs. CCE reported as- 2007(8) STR. 405(Tri. Bang.) and in Vallamattam Communications vs. CCE reported as 2008(12)STR. 267(Tri. Bang.), Chetan traders v. CCE reported as 2008(13)STR. 419(Tri. Del.)
4. As against the above findings of the Commissioner (Appeals), Revenue has reiterated the ground that in as much as the respondent was earning out of the said deals, it is to be considered as Commission agent. However, in majority of the deals Revenue has accepted that they were out-rightly purchasing and selling the goods but have contended that in some cases they have acted as commission agent. However, we note that there is virtually no evidence on record to show that the respondent acted as commission agent. The allegation made by the Revenue is only a bald allegation without support of the evidence.
5. We further note that the various documentary evidence considered by the Commissioner (Appeals) have not rebutted by the Revenue by producing counter evidence. As such, we find no reasons to interfere in the impugned order of Commissioner (Appeals). Revenues appeal is, accordingly, rejected.
[Dictated & Pronounced in the open Court].
(RAKESH KUMAR) (ARCHANA WADHWA) MEMBER (TECHNICAL) MEMBER (JUDICIAL) Anita 4 4