2017 (1) TMI 1514 - AT - Service Tax

Clearing and Forwarding Service - includibility of amount of debit notes and transportation charges in the assessable value under the category of clearing and forwarding agent service - Held that - the ld. Commissioner has recorded the finding that they do not qualify for CHA service but has not given any finding on classification of their service - Whether the issue can be classified under the category of Clearing and Forwarding Agent Service or not, therefore, the matter needs consideration whether the activity undertaken by the respondent fall under the category of clearing and forwarding agent service or not - appeal allowed by way of remand.

Summary

Issues:
1. Classification of services provided by the respondent under the category of clearing and forwarding agent service.
2. Inclusion of amounts received by the respondent in the assessable value.
3. Determination of whether the respondent was acting as a pure agent.
4. Examination of transportation charges and service tax liability on the same.

Analysis:

Classification of Services:
The appeal pertains to the Commissioner dropping a show cause notice issued to the respondent, who is registered as a clearing and forwarding agent service provider. The appellant argues that all amounts received for services should be included in the assessable value. It is contended that the Commissioner erred in not specifying if the respondent was providing clearing and forwarding agent services. The respondent, however, claims they are not registered as CHAs and do not owe service tax. The Tribunal notes the lack of a specific finding on the service classification and remands the matter for reevaluation.

Inclusion in Assessable Value:
The appellant asserts that all amounts received by the respondent should be included in the assessable value. They argue that the Commissioner erroneously dropped the show cause notice without addressing this issue. Conversely, the respondent contends they are not liable for service tax as they are not registered as CHAs. The Tribunal finds that a clear determination on the inclusion of amounts in the assessable value is necessary and directs the adjudicating authority to provide a definitive finding.

Pure Agent Status:
The appellant claims that the respondent was not acting as a pure agent, contrary to the Commissioner's view. The respondent maintains that they were providing CHA services and should not be subject to service tax. The Tribunal observes the lack of a conclusive finding on the pure agent status and instructs the adjudicating authority to examine this aspect during the fresh adjudication.

Transportation Charges and Tax Liability:
Regarding transportation charges, it is noted that the service tax was discharged by the service recipient, absolving the respondent of further tax liability on the same. The Tribunal emphasizes the need for the adjudicating authority to address this issue explicitly. The matter is remanded for a comprehensive reevaluation, ensuring a fair opportunity for the respondent to present their case.

In conclusion, the Tribunal sets aside the impugned order and remands the case for a thorough reconsideration by the adjudicating authority, focusing on the classification of services, inclusion of amounts in the assessable value, determination of pure agent status, and examination of transportation charges and associated tax liability.