2014 (1) TMI 994 - AT - Service Tax

Demand of service tax - Supervision of coal loading and transportation of coal by road - Clearing & Forwarding Agent s Services - Held that - Finance Act does not describe or define what are clearing and forwarding operations . However the Board s circular dated 11-7-1997 clearly specifies the functions undertaken by the C&F Agent in the normal course of business. The clarification issued by the Board at the time of inception of levy needs to be given due weightage following the principles of administrative construction of statutes as held by the Hon ble Apex Court in the case of Collector of Central Excise v. Andhra Sugar Ltd. - 1988 (10) TMI 38 - SUPREME COURT OF INDIA - definition given in the statute and the Board s circular it is clear that the activity undertaken by the appellant does not fall within the purview of C & F Agent s Services - activity of supervision and loading of coal does not come under the category of Clearing and Forwarding Agent s Service - Following decision of Karamchand Thapar & Bros. (Coal Sales) Ltd. v. Union of India 2009 (7) TMI 715 - CALCUTTA HIGH COURT - Decided against Revenue.

Summary

Issues:
- Classification of services under 'Clearing & Forwarding Agent's Services'
- Interpretation of relevant circulars and judicial precedents

Classification of services under 'Clearing & Forwarding Agent's Services': The case involved a dispute regarding the classification of services provided by the respondent company in the context of 'Clearing & Forwarding Agent's Services' under the Finance Act, 1994. The Revenue contended that the services rendered by the appellant fell under this category and demanded Service Tax. However, the adjudicating authority concluded that the activities did not fall within the purview of 'Clearing and Forwarding Agent's Service' and dropped the demand. The Revenue appealed this decision before the tribunal.

Interpretation of relevant circulars and judicial precedents: The Revenue relied on circulars issued by the Central Board of Excise and Customs (CBEC) to support their argument that the services provided by the appellant should be classified as 'Clearing and Forwarding Agent's Service.' They also cited a previous tribunal decision regarding coal handling services. On the other hand, the respondent argued that their services did not align with the functions typically performed by a Clearing and Forwarding Agent, as outlined in the relevant circular. They also referenced a High Court decision that supported their position.

The tribunal analyzed the statutory definition of 'Clearing and Forwarding Agent' under Section 65(25) of the Finance Act, 1994, and the functions specified in the CBEC circular. They emphasized the importance of administrative construction of statutes and judicial precedents in interpreting the scope of services. Ultimately, the tribunal agreed with the respondent's position, noting that the activities of supervision and loading of coal did not fall within the definition of 'Clearing and Forwarding Agent's Service.' They also highlighted the High Court decision supporting this interpretation. As a result, the tribunal dismissed the appeal filed by the Revenue, finding it devoid of merits.