2010 (4) TMI 1020 - HC - Central Excise

Summary

Issues:
1. Interpretation of the distinction between consignment agency service and clearing and forwarding agency service.
2. Determination of service tax liability on the amount attributable to clearing and forwarding agency service.
3. Exclusion of the value of taxable service and service tax liability based on the definition of 'clearing and forwarding agent' under the Finance Act, 1994.

Analysis:
- Issue 1:
The Tribunal had drawn a distinction between consignment agency service and clearing and forwarding agency service. The Revenue challenged this distinction, arguing that a clearing and forwarding agency is liable to pay service tax. The court referred to a previous decision and held that a service receiver from a clearing and forwarding agent falls under the definition of taxable service. Therefore, the Tribunal's decision was overturned in favor of the Revenue.

- Issue 2:
The Tribunal had ruled that the respondent was only liable to pay service tax on the amount attributable to the clearing and forwarding agency service, not on the entire amount reimbursed to M/s. BPL Ltd. The Revenue contended that the respondent should pay tax for the service received from a clearing and forwarding agent. However, the court considered the relevant period and cited a Supreme Court decision stating that no show-cause notice could be issued for collecting service tax before April 1, 1998. As the notice in this case was dated after that, it was deemed not in accordance with the law. Consequently, the court ruled in favor of the respondent, dismissing the appeal.

- Issue 3:
The Tribunal had excluded the value of taxable service and the service tax liability based on the definition of 'clearing and forwarding agent' under the Finance Act, 1994. The court reiterated that the show-cause notice issued in this case was not in line with legal precedents and hence, substantial questions of law 2 and 3 were answered against the Revenue. The appeal was ultimately dismissed based on the above analysis and legal interpretations.