2008 (9) TMI 283 - AT - Service Tax

In view of the fact that the Appellant has only received labour charges for assistance rendered from the Principal, such a service shall not attract classification under Clearing and Forwarding Agency during impugned period - applicant submit that Revisional Order passed casting liability, is devoid of merit - prima facie case not in favour of Revenue - Considering the fact that nothing could be brought out by Revenue to substantiate its case, there shall be no pre-deposit of the demand

Summary

Issues:
Challenge to Order of Revision on service classification as Clearing and Forwarding Agency Services for years 2002-03 and 2003-04, imposition of service taxes, penalty, and interest.

Analysis:
The Appellant challenged the Order of Revision passed by the ld. Commissioner, asserting that the service provided was not Clearing and Forwarding Agency Services but rather labor charges for assistance. The ld. Adjudicating Authority had previously found that the nature of service provided did not fall under Clearing and Forwarding Agency Services. The issue of classification under Clearing and Forwarding Services or Business Auxiliary Services was also raised. The Appellant argued that if any liability existed, it would fall under Business Auxiliary Services, effective from 10-9-04, and not under Clearing and Forwarding Agency Services for the relevant period.

The Revenue contended that the entire gamut of services provided by the Appellant constituted Clearing and Forwarding Agency Services, leading to the demand for payment. However, the ld. Consultant for the Appellant objected, stating that the Revisional Order lacked merit as there was no material to support bringing the Appellant under the law's purview. The Appellant requested a waiver of pre-deposit during the appeal's pendency. After hearing both sides and examining the case records, the Tribunal found no prima facie case in favor of Revenue. The Tribunal noted that there was no evidence to suggest that the Appellant's services should be classified as Clearing and Forwarding Agency Services. Since the Revenue failed to substantiate its case, the Tribunal held that there should be no pre-deposit of the demand during the appeal's pendency.

The Tribunal's decision was based on the lack of evidence to support the Revenue's classification of the services as Clearing and Forwarding Agency Services. The Tribunal emphasized that the Appellant's contention regarding job workers receiving labor charges for services provided should be tested during regular hearings. As the Revenue could not provide substantial evidence at that stage, the Tribunal ruled in favor of the Appellant, allowing no pre-deposit of the demand during the appeal process.