2016 (12) TMI 596 - AT - Service Tax

Nature of activity - classification of services as BAS or C & F Services - Held that - In view of the admitted facts that the appellant is not involved in clearing of the goods from the factories of their principal but only receives and stores such goods when delivered to them and thereafter forward the same by way of sale or otherwise as per direction of the principal. They do not provide any services of clearing. Accordingly, we hold that the services provided by the appellant are not classifiable under the classification of clearing and forwarding agent under Section 65(25) read with Section 65(105) of the Finance Act, 1994. Accordingly, we allow the appeal filed by the appellant-assessee - decided against Revenue.

Summary

Issues:
Cross appeals by assessee and Revenue against order confirming service tax, interest, and penalties for alleged short payment under C & F Services classification.

Analysis:
1. Classification of Services:
- Appellant registered under business auxiliary services, alleged to provide C & F Services.
- Show cause notice issued for short payment of service tax, proposing demand and penalties.
- Adjudication confirmed demand, penalties, and tax-cum-duty basis but accepted claim of tax-cum-duty basis.
- Appellant contested, arguing absence of C & F services elements, highlighting trade involvement and registration with Revenue.
- Citing precedent judgments, Circular of CBEC, and High Court ruling, appellant argued against misclassification.
- Revenue relied on impugned order.

2. Legal Interpretation:
- Tribunal found show-cause-notice unsustainable due to lack of issue framing for classification.
- Emphasized need for both clearing and forwarding elements for service classification under C & F agent.
- Referenced Supreme Court ruling in Coal Handlers Pvt. Ltd. and definition of C & F agent from Black's Law Dictionary.
- Noted appellant's lack of involvement in clearing goods, only receiving, storing, and forwarding as directed by principal.
- Held services not classifiable under clearing and forwarding agent category, allowing appellant's appeal and dismissing Revenue's appeal.

3. Decision and Consequences:
- Tribunal allowed appellant's appeal, dismissing Revenue's appeal, entitling appellant to consequential benefits as per law.
- Judgment delivered in open court, emphasizing non-classification under C & F agent category based on lack of clearing involvement by appellant.

This detailed analysis of the judgment highlights the key issues, legal interpretations, arguments presented, and the final decision rendered by the Appellate Tribunal CESTAT ALLAHABAD regarding the classification of services under the C & F agent category.