2013 (10) TMI 819 - AT - Service Tax

Clearing and Forwarding Agent - Appellant appointed as consignment agent by principal as per agreement appellant authorized by principal to appoint stockists/dealers/distributors on its behalf - it is not a mere case of commission agent but, on the other hand it is the responsibility fixed on the assessee to carry out the activity of getting the goods stored by clearing it and then forwarding it to the stockists and dealers appellant is covered under C & F Agent Service - In certain circumstances there may be a situation where only commission agency work is carried out and in a situation as is existing in the present case the assessee may also indulge or carry on with not only with the work of commission agent but also with the clearing and forwarding as a Consignment Agent and thus both these activities might overlap and on account of such overlap it cannot be said that the assessee would fall only under the category of commission agent and claim to distance himself from coming within the ambit and purview of clearing and forwarding agent. Coverage under definition depends on nature and activity Word include mentioned in definition clause indicating legislative intention to give extended and enlarged meaning Following decision of C.C.E., Bangalore I vs. Mahaveer Generics 2009 (11) TMI 104 - KARNATAKA HIGH COURT - Decided in favour of Revenue.

Summary

Issues:
1. Appeal against order of Commissioner (Appeals) reversing adjudication order.
2. Determination of liability for service tax on the assessee acting as a Consignment Agent.
3. Interpretation of agreements between the appellant and other parties.
4. Relevance of previous decisions by the Tribunal and High Court.

Issue 1: The appeal was filed by the Revenue against the order of the Commissioner (Appeals) dated 20.10.08, which had reversed the adjudication order dated 1.4.08 passed by the Assistant Commissioner, Mandi Gobindgarh. The Commissioner (Appeals) allowed the appeal of the assessee without analyzing the factual scenario or the agreements between the parties involved, merely relying on previous decisions. The Tribunal found this decision unsustainable due to lack of proper analysis and reversed it.

Issue 2: The main issue revolved around the determination of the liability for service tax on the assessee, who was assumed to be a Consignment Agent of certain parties. The Revenue issued a notice to the assessee to obtain registration, leading to proceedings and an adjudication order confirming the liability to tax, interest, and penalty. However, the appellate Commissioner reversed this decision without proper analysis, leading to the appeal and subsequent quashing of the Commissioner's order by the Tribunal.

Issue 3: The Tribunal considered the agreements between the appellant and the other parties, Sandeep Aggarwal and Sons, and Suresh Chander Aggarwal and Sons. The clauses of these agreements were found to be similar to those considered by the Karnataka High Court in a previous case. The High Court had concluded that the assessee in that case had indeed rendered services as a Consignment Agent based on the agreement clauses. This similarity in agreements played a crucial role in the Tribunal's decision to quash the Commissioner's order and restore the adjudication order.

Issue 4: The Tribunal highlighted the relevance of previous decisions, specifically mentioning the case of Mahavir Generics, which had been the basis for the Commissioner's decision. However, it was pointed out that the decision in Mahavir Generics had been reversed by the Karnataka High Court in a subsequent judgment. The Tribunal, considering the agreements and the High Court's decision, found the Commissioner's order unsustainable and restored the adjudication order. The appeal was allowed without costs in light of these findings.