2013 (12) TMI 377 - AT - Service Tax

Penalty u/s 76 and 78 - C & F Agent on behalf of their principal - Assessee claims that they are consignment agent and are not performing the other functions of C & F - Held that - appellant was only conducting the job of selling the principal s product without undertaking the other activities associated with C & F Agent - and has to be read as or and as such, even if one of the functions of the C & F agent is performed, the same gets covered by the definition of C & F Agent - Therefoe, appellant is entitled to unconditional stay - Following decision of Medpro Pharma Pvt. Ltd. v. CCE 2006 (6) TMI 2 - CESTAT, NEW DELHI , Kulcip Medicines (P) Ltd. 2009 (12 )TMI 851 - SUPREME COURT OF INDIA - Stay Granted.

Summary

Issues:

1. Confirmation of service tax against the appellant for the period October 2000 to March 2001.
2. Imposition of penalty under Section 76 and Section 78 of the Finance Act.
3. Determination of whether the appellant acted as a C & F Agent.
4. Interpretation of the functions associated with a C & F Agent.
5. Consideration of relevant legal precedents in determining the appellant's liability.

Analysis:

1. The judgment confirms the imposition of service tax amounting to Rs. 4,75,819 against the appellant for the specified period. The penalty of the same amount was also imposed under Section 76 and Section 78 of the Finance Act.

2. The issue at hand revolves around whether the appellant operated as a C & F Agent. The Commissioner (Appeals) rejected the appellant's argument that they were solely consignment agents and not performing other C & F functions. The decision was based on the judgment of the Hon'ble Karnataka High Court in a specific case.

3. However, upon review, it was found that the appellant primarily engaged in selling the principal's product without undertaking additional C & F Agent activities. This aspect was compared to the decision of a Larger Bench of the Tribunal in the Larsen and Toubro case, which was later distinguished in the Medpro Pharma Pvt. Ltd. case, emphasizing the interpretation of "and" as "or" in defining C & F Agent functions.

4. The subsequent decision in the Medpro Pharma Pvt. Ltd. case was considered by the Hon'ble Punjab & Haryana High Court in the Kulcip Medicines (P) Ltd. case, where it was overruled. This ruling was upheld by the Hon'ble Supreme Court when the Revenue's appeal was dismissed. Consequently, the judgment favored the appellant's entitlement to unconditional stay based on the Punjab & Haryana High Court's decision.

5. Given the legal complexities and the significance of the precedents cited, the Tribunal granted the stay petition and scheduled the appeal for disposal on a specific date, considering the straightforward nature of the issue at hand.

This detailed analysis of the judgment provides a comprehensive overview of the issues addressed and the legal reasoning applied in determining the appellant's liability regarding service tax and penalties related to their role as a C & F Agent.