2026-VIL-1818-CESTAT-KOL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Taxability of commission received after the date on which commission agent service became taxable under Business Auxiliary Service for services rendered before that date - Appellant rendered service of transferring a licence to a third party and raised debit notes for the commission before 09.07.2004, while the commission was received between 09.07.2004 and 31.03.2005 - SCN alleged non-payment of service tax under BAS on the commission received during that period, and the demand was confirmed with interest and penalty and upheld by the FAA on the ground that the commission was received after 09.07.2004 - Appellant contended that services of a commission agent were exempted by Notification No. 13/2003-ST until the introduction of Notification No. 8/2004-ST dated 09.07.2004, and that under the second proviso to Rule 6(1)(ii) of the Service Tax Rules, 1994 no service tax is payable for the period when the service was rendered - Whether service tax is payable on commission for services rendered before 09.07.2004 when the commission was received after that date - HELD - The debit notes show that the services were rendered prior to 09.07.2004, during a period when commission agent service was not taxable under BAS. The view of the adjudicating authority that the demand is sustainable because the commission was received after 09.07.2004 is not accepted, since the date of rendering of the service is relevant for determining liability and the date of receipt of the amount is not relevant. As the service was not liable to service tax when rendered, receipt of the commission later does not make the amount taxable - The demand of service tax along with interest and penalty is not sustainable, the impugned order is set aside and the appeal is allowed
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