M/s. Kumar’s Electronics Vs Commissioner of Central Excise (CESTAT Chennai)
Once the service tax has been paid on the M.R.P no service tax needs to be paid on the commission received by the distributor because it is a part of the M.R.P. If tax is so levied, it amounts to double taxation. This view held by the Tribunal has been upheld by the Hon’ble High Court of Allahabad and subsequently followed by the Hon’ble High Court of Madras. The present case, though it pertains to DTH operators, stands on the same footing and the logic, in our opinion, should be applied to these cases as well. It is true that the appellant is providing services to the DTH operators and is getting commission for such services. If the appellant had paid service tax on such commission, the main DTH operator could have availed cenvat credit of the same thereby proportionately reducing the amount paid in cash by the DTH operator. Therefore the entire exercise is also revenue-neutral. In view of the above, we find that the issue is no longer res integra. On the SIM cards, recharge coupons etc., where the service tax has been paid on the M.R.P by the main operator the commission agent / distributor need not pay service tax on the commission received by him because commission also forms part of the M.R.P. on which service tax has already been discharged.
FULL TEXT OF THE CESTAT JUDGMENT
These three appeals are filed by the appellants against impugned orders as follows :
