2007 (10) TMI 12 - AT - Service Tax

C & F Agent service -As per agreement appellant display the goods of his principal in its showroom and sold them by raising its own invoices on commission basis can t consider as C & F agent service merely on the ground the ownership not transfer to appellant - Revenue appeal set aside

Summary

Issues Involved:
Whether the respondent can be considered a Clearing and Forwarding Agent liable for service tax.

Analysis:
The issue in the appeal was whether the respondent, a company operating a store, can be categorized as a Clearing and Forwarding Agent and thus be liable to pay service tax. The Commissioner (Appeals) had ruled in favor of the respondent, stating that the activities conducted by them did not align with those of a C & F agent. The respondent's arguments included not warehousing goods for the principal, not maintaining records of goods, and selling goods under their own invoices. The appellate authority examined the agreement between the respondent and the principal company, noting clauses related to consignment, sale, commission, and promotional activities. The agreement did not involve the respondent receiving dispatch orders, arranging dispatch, or preparing invoices on behalf of the principal.

The appellate authority observed that providing storage facilities alone did not constitute services of a C & F agent, as clarified by a Board circular. The authority referred to a previous Tribunal decision to support the conclusion that the respondent's activities did not fall under the services provided by a C & F agent. The revenue, in their appeal, acknowledged that the respondent was appointed as a consignment agent for stocking, displaying, and selling goods from the showroom. However, the revenue's argument was countered by citing a Tribunal decision that commission agents are not considered C & F agents. The revenue's appeal was further rejected based on the absence of key activities typically undertaken by C & F agents, such as receiving dispatch orders, arranging dispatch, and preparing invoices on behalf of the principal.

In conclusion, the Tribunal upheld the Commissioner (Appeals)' decision, emphasizing that the respondent's role was that of a shopkeeper selling goods under their own invoice, not a Clearing and Forwarding Agent. The judgment highlighted the distinction between the activities of a C & F agent and those of the respondent, ultimately rejecting the revenue's appeal.