2018 (11) TMI 834 – CESTAT HYDERABAD – TMI – SSI Exemption – use of brand name of others – earning commission for promotion by way of marketing and selling of branded goods under the brand name/trade name viz., BATA on behalf of their principals M/s Bata India Ltd. – case of appellant is that the said commission is less than threshold limit under the Notification No. 06/2005-ST and 33/2012 it is not taxable.
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Held that:- Services rendered by the appellant is to Bata India Limited and get paid for such services; appellant is not into rendering of any branded services to customers, who purchase only branded footwear from the outlet. In this situation, the argument of the Revenue that services rendered by the appellant being in the Bata showroom are taxable services provided by a person under a brand name or trade name it cannot be held so.
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Similar issue decided in the case of Commissioner of Central Excise, Chandigarh Vs. A.S. Financial [2014 (7) TMI 746 – CESTAT NEW DELHI],
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lant (s) Respondent(s) Impugned Order 1. ST/27655/2013 Anusha Enterprises CC, CE, Visakhapatnam -II OIA No. 22/2013 (VII) ST dated 17.05.2013 2. ST/30254/2016 -dodo- OIA No. VIZ-EXCUS-002-APP-048-15-16, dated 28.10.2015 3. ST/31131/2017 -dodo- CCT, Visakhapatnam – GST OIA No. VIZ-EXCUS- 002-APP-026-17-18 dated 30.06.2017 4. ST/30459/2018 -dodo- OIA No. VIZ-EXCUS- 002-APP-116-17-18 dated 08.02.2018 3. Brief facts of the case are that the appellant is engaged in marketing of Bata brand footwear on commission basis. Investigation was launched and it was found that the appellant was earning commission for promotion by way of marketing and selling of branded goods under the brand name/trade name viz., BATA on behalf of their principals M/s Bata India Ltd. The Department viewed the appellant s service as a Commission agent was covered under Business Auxiliary service/Taxable service and is liable for payment of service tax under the provisions of the Finance Act, 1994. Show cause notice vide
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greed commission of 7% of the retail sale price, the total price of which for the previous year was less than ₹ 10 lakhs and therefore entitled to the benefit of SSI threshold exemption available under Notification No. 33/2012-ST dated 20.06.2012; that in order to constitute a service as one rendered under a brand name, the same needs to be a service provided using a brand name belonging to one person and the service recipient should be a person other than the brand name holder. In their case, they are not providing any service to a third person, under the brand name of BATA ; that penalties cannot be imposed, even if the issue of taxability is ultimately decided against them, as they are under the bonafide belief that they are not liable to pay service tax; They relied upon the decision of Hon ble CESTAT in Peoples Automobiles Ltd., Vs. CCE, Kanpur [2011 (24) STR 635 (Tri- Del)] and Gagandeep Singh Vs. CCE, Delhi [2012-TIOL-142-CESTAT-Del.]. 3.2 The Adjudicating Authority intera
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ate of one percent per month of the demand, whichever is higher under Section 76 of the Act. The lower authority further imposed a penalty of ₹ 10,000/- under Section 77(1)(a) for failure to obtain registration and thus violating Section 69; and penalty of ₹ 10,000/- under Section 77(2) of the Act, for failure to furnish ST-3 returns mandated by Section 70 of the Act. 4. Aggrieved by such an order, appellant preferred an appeal before the First Appellant Authority. In all these cases, the First Appellate Authority held the order of the Adjudicating Authority. Hence this appeal. 5. Learned Counsel appeared for the appellant after narrating the factual matrix and the services rendered by the appellant, submits that appellant is claiming the benefit of small scale service provider exemption granted to them under Notification No. 06/2005 as amended and Notification No. 33/2012. It is her submission that the entire issue involved in all these appeals is during the period from 20
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on, the tax liability confirmed denying the benefit of exemption notification is not in accordance with the law is settled in various forums. She relies upon the various decisions, Peoples Automobiles Ltd., [2011 (24) STR 635], MRS Jaspreet Kaur & MR Gagandeep Singh Vs. CCE, Delhi [2012-TIOL-142-CESTAT-Del.], Bakliwal Brothers Vs. CCE, Raipur [2017 (51) STR 7] and Commissioner of Central Excise, Chandigarh Vs. A.S. Financial [2015 (37) STR 400]. She submits that the issue new squarely covered in their favour. 6. Learned Departmental Representative reads the findings of the First Appellate Authority and submits that the services rendered by the appellant are undisputedly taxable. It is his submission that the findings of the First Appellate Authority that in the instant case appellant title is M/s Anusha Enterprises is succeeded by the words Bata Shoe Stores , invoices for sale are in the name of Bata as per the show cause notice. It is his submission that the First Appellate Author
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t is necessary in the public interest so to do, hereby exempts taxable services of aggregate value not exceeding four lakh rupees in any financial year from the whole of the service tax leviable thereon under section 66 of the said Finance Act: Provided that nothing contained in this notification shall apply to, – (i) Taxable services provided by a person under a brand name or trade name, whether registered or not, of another person; or (ii) Such value of taxable services in respect of which service tax shall be paid by such person and in such manner as specified under sub-section (2) of section 68 of the said Finance Act read with Service Tax Rules, 1994. 9. After considering the submissions made, it is seen from the proviso 1(i) on which reliance placed by the Revenue, we find that in the case in hand, services rendered by the appellant is to Bata India Limited and get paid for such services; appellant is not into rendering of any branded services to customers, who purchase only bran
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nt during each financial year, during the period of dispute, is less than ₹ 4 Lakhs. The only point of dispute is as to whether the respondent are eligible for small scale provider exemption under Notification No. 6/2005-S.T. and in this regard, the only point of dispute is as to whether the respondent were providing the Business Auxiliary Service to their client ICICI Bank Ltd. under brand name of another person, as if the service being provided by a small service provider is under the brand name of another person, the exemption under Notification No. 6/2005-S.T. would not be available. In this regard, the department s contention is that from the various clauses in the respondent s agreement with the ICICI Bank Ltd., it is clear that the marketing services and customers assistance services being provided by the respondent to the ICICI Bank Ltd. is under the brand name of the ICICI Bank and in this regard, the department refers to Clause 2, Clause 6 and Clause 10 of the responden
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e available to the respondent the advertisement materials including posters, leaflets, displays, flyers, stickers, signs, cards, which the respondent shall prominently display, maintain and distribute at their own expenses. In our view, there is nothing in the above clauses from which it can be inferred that the respondent were providing the Business Auxiliary Services to ICICI Bank Ltd. under the brand name of ICICI Bank Ltd. Just promoting the service products of ICICI Bank Ltd. and for this purpose, using the advertisement and publicity materials, etc. provided by the ICICI Bank Ltd., or displaying the banners with the words Franchise of ICICI Bank Ltd. on their premises would not mean that the respondent are providing the Business Auxiliary Services of marketing to their client ICICI Bank under the brand name of ICICI Bank Service provided by the Respondent is Business Auxiliary Service of promoting and marketing the services being provided by ICICI Bank Ltd. and the services being
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findings in the case of A.S. Financial, the respondent was specifically providing the marketing services and display banners and equipments and other items were of the expenses of A.S. Financial. The issue involved in this case in hand by squarely covered by the above said ratio and we find no reason to deviate from such a view already taken. 11. Similar views were expressed by the various Benches as per the laws cited herein above. Another case law, which is similar to the issue involved, is Bakliwal Brothers Vs. CCE, Raipur (supra) wherein, the appellant was having a shop and activity of promoting sale of Koutons brand of readymade garments. The bench again held that such activity is not taxable, benefit of exemption for small scale service providers is available. 12. In view of the foregoing, we hold that the all impugned orders are unsustainable and liable to be set aside and we do so. The impugned orders are set aside and the appeals are allowed. (Order pronounced & dictated
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