2009 (1) TMI 43 - AT - Service Tax

Appellant appointed by Delhi Vidyut Board as coal agent/consultant for supervision of coal loading at the colliery end and for dispatch to two power stations - applicant submit that he has no role as clearing and forwarding agent in the despatch of the coal. - Prima facie, it appears that the activities undertaken by the applicant are under the category of clearing and forwarding agent - applicant failed to make out a case for waiver of pre-deposit of the entire amount of tax and penalty

Summary

Issues:
1. Application for waiver of pre-deposit of service tax and penalty.
2. Classification of activities under the category of clearing and forwarding agent.

Analysis:
The judgment by the Appellate Tribunal CESTAT, New Delhi involved the consideration of an application for the waiver of pre-deposit of service tax and penalty amounting to Rs.8,30,371/- along with an additional penalty of Rs.5000/- on one of the applicants. The tax was demanded based on the classification of the applicant as a clearing and forwarding agent. The advocate for the appellant argued that the applicant's role was supervisory in nature, specifically in overseeing the dispatch of coal from colliery to Delhi Vidyut Board, as per the agreement terms. However, the Tribunal, after reviewing the Commissioner (Appeals) order and the activities undertaken by the applicant, noted various responsibilities performed by the applicant, such as liaising with railway authorities, supervising coal loading, ensuring quality dispatch, weighment supervision, and monitoring wagon movement, which align with the duties of a clearing and forwarding agent.

The Tribunal further referenced a letter from Delhi Vidyut Board appointing the applicant as a coal agent/consultant for coal loading supervision and dispatch to power stations, indicating a prima facie alignment with the activities of a clearing and forwarding agent. Consequently, the Tribunal concluded that the applicant failed to establish a case for the waiver of the entire tax and penalty amount. As a result, the Tribunal directed the applicant to pre-deposit Rs.3 lakhs within six weeks and report compliance by a specified date. Upon this pre-deposit, the balance amount of tax and penalty was waived until the appeal's disposal. The judgment was pronounced in open court by Member (Judicial) P. K. Das, and the applications were disposed of accordingly.