2009 (1) TMI 23 - AT - Service Tax

Whether services of the appellant for sale of recharge coupon; cash cards, SIM etc. of M/s. SPICE Communication Pvt. Ltd. would come within the definition of Clearing & Forwarding Agents services - Prima facie, we do not find any material to determine the tax liability under the category of C & F Agent . We have also noticed that the applicant obtained registration under the category of Business Auxiliary Services and have paid an amount of Rs. 9,97,221/- stay granted

Summary

Issues:
1. Whether services provided for the sale of recharge coupons, cash cards, SIM cards, etc., would be classified as 'Clearing & Forwarding Agents' services.

Analysis:
The dispute in this case revolved around whether the services provided by the appellant for the sale of various items for M/s. SPICE Communication Pvt. Ltd. would fall under the definition of 'Clearing & Forwarding Agents' services. The appellant contended that they were engaged in the sale of pre-paid and post-paid connections, arguing that their activities did not align with the role of a 'C & F Agent.' The Commissioner (Appeals) had directed the appellant to make a pre-deposit towards service tax and penalty, which was contested by the appellant.

The Departmental Representative argued that the activities of the appellant resembled those of a C & F agent rather than a mere commission agent for M/s. SPICE Communication Pvt. Ltd. It was emphasized that the appellant failed to establish a prima facie case supporting their position. However, upon reviewing the arguments and evidence presented by both parties, the Tribunal found that the appellant's engagement primarily involved the sale of pre-paid and post-paid connections and recharge coupons as a distributor for M/s. SPICE Communication Pvt. Ltd. The Tribunal noted that the appellant had registered under the category of 'Business Auxiliary Services' and had made a partial payment towards the tax demand.

Ultimately, the Tribunal concluded that there was insufficient evidence to determine the tax liability under the category of 'C & F Agent.' While acknowledging that the appellant had made a prima facie case for the waiver of the balance tax and penalty pre-deposit, the Tribunal remanded the matter back to the Commissioner (Appeals) for a fresh decision on merit without requiring any pre-deposit. The Tribunal clarified that its prima facie observation should not influence the Commissioner (Appeals) in deciding the case on its merits. The appeal was disposed of by way of remand, allowing the stay application.

In summary, the judgment focused on the classification of the appellant's services in relation to 'Clearing & Forwarding Agents' services, highlighting the specific nature of the appellant's activities and the need for a fresh decision by the Commissioner (Appeals) based on merit without insisting on pre-deposit amounts.