2008 (11) TMI 145 - AT - Service Tax

Appellant procuring the orders from the dealers and getting the commission thereon during investigation appellant have already clarified the nature of services vide their letter addressed to the Deputy CCE appellant submits that the impugned order passed by relying upon the decision of the Tribunal in the case of Prabhat Zarda Factory (India) Ltd., which has been overruled by the LB of the Tribunal in the case of Larsen and Toubro Ltd. held that mere procuring of orders on commission are not taxable under C/F Agent service

Summary

Issues: Determination of whether services provided by the appellant fall under the category of "clearing and forwarding agency" during the period 2003-2004.

Analysis:
The case involved a dispute regarding the classification of services provided by the appellant as either that of a "clearing and forwarding agency" or a mere commission agent. The appellant contended that they were a selling agent procuring orders for M/s. Raymond Ltd. and receiving commission, not involved in physical handling, storage, or invoicing of goods. The appellant cited a letter clarifying their activities to the Deputy Commissioner. The adjudicating authority relied on a previous Tribunal decision, which was later overruled by a Larger Bench decision in a different case. The Tribunal analyzed the appellant's activities as per the letter and found that they were not solely engaged in procurement but did not perform clearing and forwarding operations. The Tribunal disagreed with the Commissioner (Appeals) who interpreted the agreement differently and set aside the impugned order, allowing the appeal with consequential relief.

The key legal principles discussed included the distinction between a commission agent and a clearing and forwarding agent. The Tribunal referenced the definition of "commission agent" under the Central Excise Act and the scope of activities covered under "business auxiliary service." The Tribunal emphasized that the mere procurement of purchase orders by a commission agent does not automatically entail clearing and forwarding operations. The judgment highlighted that the activities of procuring orders and clearing and forwarding operations can be distinct and performed by different agents. The Tribunal's decision was influenced by the overruling of a previous Tribunal decision by a Larger Bench, emphasizing the importance of the specific activities undertaken by the appellant in determining their classification.

In conclusion, the Tribunal's analysis focused on the specific activities undertaken by the appellant, as clarified in their letter to the Deputy Commissioner, to determine whether they qualified as a clearing and forwarding agency. The Tribunal's decision was based on the distinction between commission agents and clearing and forwarding agents, as well as the impact of a previous Tribunal decision being overruled by a Larger Bench. The judgment ultimately set aside the Commissioner (Appeals) order, allowing the appeal in favor of the appellant.