2007 (11) TMI 77 - AT - Service Tax

Appellant being a mere coordinator without having control over the goods of the principal nor even as agent, shall not liable to be classified under the head of Clearing and Forwarding Agent - Larger Bench decision of Larsen and Toubro case applicable so appellant is not liable to pay tax

Summary

Issues: Classification of services as Clearing and Forwarding Agent Service

Analysis:
The appeal in this case revolved around determining whether the activities carried out by the Appellant should be classified as Clearing and Forwarding Agent Service. The Appellant's activities included coordinating the execution of orders, attending to material receipt and transportation, ensuring compliance with laws and rules, coordinating inspections, document clearance, and payment receipt, as well as follow-up for timely delivery. The Appellant argued that they should not be considered a Clearing and Forwarding Agent based on a Larger Bench decision overruling a previous judgment. The Authorities were also challenged for assessing the Appellant under Business Auxiliary Services, which became taxable after the assessment period. The ld. JDR supported the Appellate Order.

Upon hearing both sides and examining the record, it was concluded that the activities performed by the Appellant did not fall under the classification of Clearing and Forwarding Agent Service. The Larger Bench decision and a subsequent Tribunal judgment were cited to support this conclusion. It was emphasized that the Appellant acted as a mere coordinator without control over the principal's goods, hence not meeting the criteria for classification as a Clearing and Forwarding Agent. The order of the Appellate Authority below failed to provide factual circumstances to distinguish the case from the Larger Bench decision. Consequently, the appeal was allowed, and the Stay Petition was deemed infractuous.

In summary, the judgment clarified that the nature of activities carried out by the Appellant did not align with the definition of Clearing and Forwarding Agent Service. The decision was based on the Appellant's role as a coordinator without direct control over the goods, leading to the appeal being allowed in favor of the Appellant.