2008 (7) TMI 154 - AT - Service Tax

Appellants are engaged in handling and storage of iron and steel materials of M/s. RIN Ltd. as a consignment agent in respect of stock yard at Agra & Kanpur In the present case there is one contract & the appellants are also charging the total consideration amount under a single bill therefore there is no merit in the contention of appellants that the charges in respect of transportation loading & unloading are not to be considered for fixing the liability as consignment agent

Summary

Issues:
1. Whether transportation charges should be included in the assessable value for service tax liability of consignment agents.
2. Whether expenses related to loading, unloading, cutting, bending, and straightening of materials should be considered in determining the liability of consignment agents for service tax.

Analysis:
1. The appellants, engaged in handling and storage of iron and steel materials as consignment agents, contested the demand of service tax on the gross amount charged. They argued that transportation costs should not be included in the assessable value for service tax liability. They relied on a Tribunal decision stating that lorry freight charges for clearing and forwarding agents should not be included. However, the Revenue contended that as consignment agents, the appellants provided a comprehensive service including transportation, loading, and unloading, and thus, these charges should be part of the assessable value. The Tribunal found that the appellants charged a composite bill for their services, making the inclusion of transportation charges justified.

2. Regarding expenses like cutting, bending, and straightening of materials during storage, the appellants argued that these activities were not part of the consignment agent's service and should not be considered for service tax liability. The Tribunal agreed, stating that such functions were unrelated to the consignment agent's service and should not be included in determining their liability. Therefore, the impugned order was modified to exclude charges for these activities, while upholding the rest of the order. The appeal was disposed of accordingly.