Custom, Excise & Service Tax Tribunal
Ms. Anshita Chawala & vs Cst, New Delhi on 26 November, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066.
Date of Hearing/Order : 26.11.2014
No. ST/Misc./60593/2013, ST/Stay/60592/2013 and ST/59858/2013-CU(DB)
[Arising out of Order-in-Appeal No. 45/ST/APPL/DLH-IV/2013 dated 4.7.2013 passed by the Commissioner (Appeals), Service Tax, New Delhi]
For Approval & Signature :
Honble Mr. Justice G. Raghuram, President
Honble Mr. R.K. Singh, Member (Technical)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3.
Whether their Lordships wish to see the fair copy of the order?
4.
Whether order is to be circulated to the Department Authorities?
Ms. Anshita Chawala & Appellant
Mr. Ramesh Chawla
Vs.
CST, New Delhi Respondent
Appearance:
Shri Sanjay Tiwari, Advocate - for the Appellant
Ms. Suchitra Sharma, A.R. - for the Respondent
Coram : Honble Mr. Justice G. Raghuram, President
Honble Mr. R.K. Singh, Member (Technical)
F. Order No. 54695/2014
Per R.K. Singh :
The assessee filed Misc. application requesting for exemption from the requirement of making any further deposit of the amount confirmed. They also filed stay application for the same purpose along with their appeal against Order-in-Appeal No. 45/ST/Appl/DLH-IV/2013 dated 4.7.2013 which upheld the order-in-original in terms of which a duty demand of Rs.5,43,416/- was confirmed along with interest and penalties under Sections 77 & 78 of Finance Act, 1994. The appellants were distributor/marketing agency of M/s Forever Living India Pvt. Ltd. and were thus covered under Business Auxiliary service but did not pay any service tax on the commission received by them. During the period 1.4.2004 to 31.3.2009, they were issued Show Cause Notice but did not submit any reply at all. During the personal hearing they appeared only to say that they will give written submissions which also they never did.
2. The appellants have contended that they were selling their own goods and therefore are not covered under Business Auxiliary Service.
3. We have considered the facts. It is seen that the appellant did not submit any reply to the show cause Notice. The impugned demand is based on the amount of commission received by them under multi level marketing scheme. So their plea that they were selling their own goods is obviously untenable and also devoid of any basis and also this plea was never put forth by them earlier. Indeed the issue is squarely covered against them vide CESTAT order in the case of Shri Surendra Singh Rathore & Others Vs. CCE, Jaipur-I - 2013 (3) ECS (224) (Tri.-Del), wherein it was held as under :
7. On analysis of the terms of conditions of similar agreements between the FSL and petitioners, the adjudicating authority confirmed the tax liability against the appellants. We are satisfied that RCM (Right Concept Marketing) Business Marketing Plan is neither a new arrangement nor there is any concept of dividends as suggested by the ld. Counsel. This is a clear Multilevel Marketing Service Scheme. The consideration/commission received by the appellants from FSL (this fact is not disputed) is the result of the marketing/promotion of FSL products by the appellants and constitutes a service (Business Auxiliary Service), provided in respect of FSL products to FSL. The commission/consideration is provided according to the terms and conditions, for marketing/promotion effort by the appellants. The receipt of commission by the appellants clearly makes them providers of Business Auxiliary Service as defined under Section 65(19) of the Act. The appellate and adjudication orders are impeccable on this analysis and warrant no interference.
4. Thus, we find the issue is squarely covered against the appellants and we find no merit in their appeal. Accordingly, we waive the requirement of pre-deposit and dismiss the appeal. As a consequence, the Misc. application and stay petition also stand disposed of.
(Justice G. Raghuram) President (R.K. Singh) Member (Technical) RM 1