2017 (3) TMI 1154 - AT - Service Tax

Cargo handling services - unloading of trucks/trailers, stacking them in godown and loading of trucks against delivery challans, maintaining all the records/ registers, formats and submission of daily/ periodical reports in respect of dumps of M/s Binani Cement Limited - whether the services rendered are to be treated as C&F agent service or cargo handling service? - Held that - the issue is covered in favor of the appellant as per the ratio laid-down in the case of Narottam & Company vs. CCE, Jaipur 2013 (8) TMI 291 - CESTAT NEW DELHI where it was observed that the appellant only providing the labour for loading of cement at the rail heads, loading into the trucks for transportation to the storage godown of M/s Binani Cement and thereafter unloading at the godown and its stacking and thereafter arranging the dispatch of the cement as per the directions of M/s Binani Cement, that they also maintained a record of the receipt and dispatch, that the activity of the appellant is only of forwarding and not clearing and forwarding and, hence, the same is not taxable - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the appellant's services qualify as that of a C&F agent for levying service tax.

Analysis:
The appeal was filed against the order-in-appeal passed by the Commissioner of Central Excise (Appeals) Jaipur, covering the period from 01.04.2000 to 09.09.2004. The appellant was appointed as a handling agent for M/s Binani Cement Limited, primarily responsible for loading and unloading goods. The lower authorities had categorized the services provided by the appellant as that of a C&F agent, resulting in the imposition of service tax. The appellant contested this classification, leading to the current appeal.

During the proceedings, it was revealed that the appellant had obtained service tax registration from 06.10.2004 and started paying service tax from 10.09.2004. The appellant argued that the godown and related facilities were provided by M/s Binani Cement Limited. The Tribunal referred to a previous case, Narottam & Company vs. CCE, Jaipur, where it was established that the appellant's activities were akin to forwarding services rather than clearing and forwarding, making them non-taxable.

Furthermore, the Tribunal cited the decision in the case of Medpro Pharma Pvt. Ltd. vs. CCE, Chennai, where it was emphasized that the appellant's role was limited to forwarding activities. The goods' dispatch from the factory to the godown was managed by M/s Binani Cement, including the rental of the godown and deployment of their staff. Consequently, the Tribunal concluded that the appellant's services did not fall under the category of a C&F agent, as per the Finance Act, 1994.

Based on the above analysis and legal precedents, the Tribunal found no merit in the impugned order and set it aside, ultimately allowing the appeal filed by the appellant. The judgment highlighted the distinction between forwarding and clearing and forwarding services, leading to the favorable decision for the appellant.