2007 (9) TMI 116 - AT - Service Tax

Licensed auctioneer Considering terms and conditions of license it is clear that licensee acted only as a auctioneer, no any clearing or forwarding activity is done Mere receiving and storing goods for auction is not a C/F agent service Impugned service of auctioneer is not taxable

Summary

Issues:
Revenue challenging Commissioner (Appeals) order categorizing auctioneers as not "clearing and forwarding agents".

Analysis:
The case involved a challenge by the Revenue against an order categorizing auctioneers as not "clearing and forwarding agents". The respondents were engaged in cardamom auctioning, governed by the Cardamom (Licensing and Marketing) Rules, 1987. The Revenue argued that the activities of receiving, storing, and selling cardamom constituted taxable services of clearing and forwarding agents. The Department contended that these activities fell under the definition of clearing and forwarding agents as per Section 65(25) of the Finance Act, 1994, and Trade Notice No. 103/97 of Cochin Commissionerate.

The sale of cardamom was statutorily regulated under the Spices Board Act, 1986, and the Cardamom (Licensing and Marketing) Rules, 1987. The Rules required business in cardamom to be conducted by licensed auctioneers or dealers. The auctioneer's license specified conditions such as conducting auctions as per Board specifications, charging a maximum of 1% commission, and ensuring timely payments to growers. The licensing conditions did not involve clearing or forwarding activities but focused on auctioning cardamom brought by growers or dealers.

Upon scrutiny, it was evident that the auctioneers acted solely as auctioneers under statutory regulations and licensing conditions. The auction process was completed upon the fall of the hammer, with no involvement in clearing or forwarding operations. The provisions related to taxable services of clearing and forwarding agents did not align with the auctioneers' activities. The Court highlighted that short-term storage services could be part of auctioning property but were distinct from clearing and forwarding operations. As the auctioneers' activities did not match the criteria for clearing and forwarding agents, the impugned order was upheld, and the appeals were dismissed.

In conclusion, the Tribunal ruled in favor of the respondents, dismissing the Revenue's appeal. The judgment emphasized that the auctioneers' activities as licensed auctioneers did not constitute clearing and forwarding operations as per the relevant legal provisions and licensing conditions. The decision was based on the specific nature of the auctioning business and the absence of evidence indicating any clearing or forwarding activities, leading to the rejection of the Revenue's arguments.