2011 (5) TMI 72 - AT - Service Tax

Demand of service tax - Appeal is filed by the Revenue against the order for setting aside the demand of service tax on the cutting and bending charges being not included in the value of the taxable services rendered by the respondent - Held that an identical issue in the case of Agra Steel Corporation Vs. CCE Kanpur reported in 2008 - TMI - 31492 - CESTAT NEW DELHI was decided in favour of the assessee - Hence do not find any merits in the appeal filed by the Revenue and the same is rejected.

Summary

Issues:
Appeal against setting aside service tax demand on cutting and bending charges not included in taxable services value.

Analysis:
The appeal was filed by the Revenue against the Order-in-Appeal setting aside the demand of service tax on cutting and bending charges not included in the value of taxable services provided by the respondent. The Tribunal noted that the respondent provided cutting and bending services during the warehousing period, which were not included in the gross value of the service charges under C&F Agency Services. The Tribunal referred to a previous case where it was held that charges for cutting, bending, and straightening of materials during warehousing are not related to the service provided by the consignment agent. Therefore, these charges should not be included in fixing liability for the consignment agent. The Tribunal found the previous judgment binding on the case at hand and rejected the Revenue's appeal, stating that there were no merits in the appeal.

This judgment clarifies that charges for cutting and bending services during the warehousing period should not be included in the taxable service value under C&F Agency Services. The decision is based on the principle that such functions are not directly related to the services provided by the consignment agent. The Tribunal's reliance on a previous case where a similar issue was decided in favor of the assessee strengthens the argument for excluding these charges from the taxable service value. The Tribunal's rejection of the Revenue's appeal indicates a consistent application of this interpretation across cases involving similar circumstances.