M/s Paramount Impex Pvt. Ltd. Versus CST, Delhi-I
Payment of commission to overseas agents – Wether covered under Business Auxiliary service – reverse charge mechanism – Held that:- Commission paid to overseas commission agents for promoting sale of their goods is clearly covered under the Business Auxiliary Service and so the appellants are liable to pay service tax under the reverse charge mechanism with effect from 18.4.2006 in terms of Section 66A of the Finance Act, 1994. There are no pleadings to contest this aspect and therefore no further elaborate discussion on this point is required. As regards the plea that only one penalty either under Sections 76 or under Section 78 should be imposed, we notice that, as has been conceded by the ld. AR, the adjudicating authority has imposed only one penalty under Sections 78 and 76 together. Thus in effect, there is only one penalty which is equal to the adjudicated service tax liability which therefore is to be treated to have been imposed under Section 78 ibid. As regards the contention of the appellants that the benefit of reduced (25% of the mandatory equal penalty) under Section 78 ibid should be extended to them as the same has not been extended by the lower authorities. Following decision of Ratnamani Metal Tubes Ltd. [2013 (12) TMI 1397 – GUJARAT HIGH COURT] – penalty under Section 78 will be reduced to 25% of the adjudicated service tax liability provided the adjudicated service tax liability (along with interest) and the reduced penalty (i.e. 25% of the mandatory equal penalty) are paid within 30 days of the receipt of this order. – Decided partly in favour of assessee.
Source – TMI