Nature of business services is more important rather than brand name used in case of providing exemption: CESTAT Ahmedabad

Venus Corporation Vs Commissioner of CGST & Central Excise (CESTAT Ahmedabad)

Facts – The appellants are cable operator and providing cable services to the subscribers on the basis of signals received from the MSO. The subscriber has not asked for any brand for providing the said services. The appellant is contending that it is eligible for small scale service provider exemption under for the period 2005-06 to 2006-07 in respect of their service i.e. Commission Agent service under Business Auxiliary Service. The appellant is a provider of services on behalf of M/s. HFCL and receiving commission from them. The appellant receiving collection under the brand/trade name of M/s. HFCL and is rendering Business Auxiliary Service to M/s. HFCL under its own name. On the other hand, the department contends that the appellant has provided service of Business Auxiliary Service to their clients and the service provided on the brand name of another person therefore the appellant are not entitled for exemption.

Conclusion- There is no dispute about the nature of service. The appellant has provided Commission Agent service to their clients. The appellant as a commission by mediates between their client and customer of the client, while providing commission agent service and does not use the brand name of the service providers for the reason that they are providing service on behalf of the client and there is no need of brand name for providing service to the same client. Therefore, the department without any basis made a bald allegation that appellant is using brand name for providing Commission Agent service.

The judgment of Maheshwari Industries (supra), was referred in the case which says –

A person may be taken to be manufacturing specified goods, bearing a brand name or trade name only if the name, mark or symbol used as such, is intended to indicate a connection in the course of trade between such specified goods and some person using such mark or name. If the use of the brand name or trade name is not intended for the purpose of indicating a connection in the course of trade between such specified goods and the person using such name or mark, then the same may not fall within the definition of the expression brand name or trade name.

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