2014 (8) TMI 412 - AT - Service Tax

Waiver of pre deposit - Clearing and Forwarding Agents - Held that - Appellant are engaged in the activity of marketing and selling of the products manufactured by their principal by procuring purchase orders for their principal. The goods are being dispatched by their principal directly to their customers and for introducing the customers to their principal-manufacturer they were getting commission. The said activity is not covered under the category of Clearing and Forwarding Agents Service during the impugned period, 2000 to 2003. Therefore, the show cause notice as well as the adjudication order impugned, were not warranted - Decided in favour of assessee.

Summary

Issues:
Service tax demand under the category of 'Clearing and Forwarding Agents' for the period 2000 to 2003.

Analysis:
The appellant, a selling agent, was alleged to be a 'Clearing and Forwarding Agent' by the Revenue. The agreement between the appellant and their principal was crucial in determining the nature of their activities. The Tribunal examined clauses 3 and 4 of the agreement dated 3-12-2002. These clauses outlined the responsibilities of the appellant in sales, marketing, and sales promotion of the principal's products. It was noted that the goods were dispatched directly by the principal to customers, and the appellant received commission for introducing customers to the principal. The Tribunal concluded that the appellant's activities did not fall under the category of 'Clearing and Forwarding Agents Service' during the period in question (2000 to 2003).

The Tribunal found that the appellant's role was primarily in marketing and selling products, not in traditional clearing and forwarding activities. As a result, the show cause notice and the adjudication order demanding service tax were deemed unwarranted. The Tribunal set aside the impugned order, allowing the appeal with consequential relief. Additionally, the stay application was disposed of accordingly.