2013 (12) TMI 378 - AT - Service Tax

Demand of service tax - C & F Agent services - Assessee contends that they have simply providing cement from the company as a trader under the company s sales invoices and sold cement to petty customers from their shop under their own sales bills/cash memos therefore No activity covered by the definition of C & F Agency services was being undertaken by them - Held that - Original Adjudicating Authority having dropped the demand, the appellant would be on their stay on the above point. Nothing has been shown to us indicating that the appellants were acting as C & F Agent for the principal. On the other hand, we find that the appellants were buying and selling the goods on the basis of the invoices issued by the principal and the sales invoices/cash memos issued by them. As such, at this prima facie stage, we are of the view that the appellant has been able to make out a good case in their favour so as to allow the stay petition - Stay granted.

Summary

Issues:
Service tax liability for providing C & F Agent services.

Analysis:
The judgment deals with the issue of service tax liability concerning the provision of C & F Agent services to a company. The appellant contended that they were merely acting as traders, providing cement from the company under the company's sales invoices and selling it to customers from their shop under their own sales bills/cash memos. The Original Adjudicating Authority accepted this plea and dropped the demand for service tax amounting to Rs. 33,883/- against the appellant.

Subsequently, the Commissioner reviewed the order and issued a show cause notice, alleging that the appellant had not provided any proof to support their claim of purchasing and selling cement in retail. However, the Tribunal noted that the Original Adjudicating Authority had already dropped the demand based on the appellant's explanation. The Tribunal observed that there was no evidence to suggest that the appellants were acting as C & F Agents for the principal company. Instead, it was found that the appellants were engaged in buying and selling goods based on invoices issued by the principal and their own sales invoices/cash memos.

Therefore, at the prima facie stage, the Tribunal concluded that the appellant had made a compelling case in their favor to warrant the unconditional allowance of the stay petition. The Tribunal emphasized that the appellant's activities did not fall within the scope of C & F Agency services, as they were primarily engaged in trading activities rather than acting as agents for the principal company. The judgment highlights the importance of substantiating claims with evidence and the need for a thorough review of facts before confirming tax liabilities.