2018 (7) TMI 1284 - AT - Service Tax

Valuation - inclusion of transportation cost in assessable value - Clearing & Forwarding Agent Services - whether the freight is includible under the services provided by the respondent or not? - Held that - It is very strange that the Revenue has alleged some allegations and the assessee is in defence taken the ground and no opportunity was given to him to defend the case that the activity of Clearing & Forwarding Agent Service does not fall under the category of Clearing & Forwarding Agent Services as alleged by the Revenue in the show cause notice. It does not mean that the said challenge cannot be addressed by the Learned Commissioner (Appeals). In fact against the finding of the ld. Commissioner (A) that the activity undertaken by the respondent does not fall under the category of Clearing and Forwarding Agent Services has not challenged. In that circumstances Learned Commissioner (Appeals) did not fell in error that their activity does not fall under the category of Clearing & Forwarding Agent Services. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Whether the activity undertaken by the respondent falls under the category of Clearing & Forwarding Agent Services.
2. Whether the transportation cost should be included in the assessable value by the respondent in the services provided.

Analysis:
1. The appeal was filed by the Revenue against the order where the Learned Commissioner (Appeals) determined that the respondent's activity does not fall under Clearing & Forwarding Agent Services. The show cause notice alleged that the transportation cost was not included in the assessable value by the respondent. The audit revealed that the respondent recovered freight from the service receiver. The Revenue contended that the issue in the notice was solely about the inclusion of freight in the services provided, not about the nature of the activity. However, the Commissioner's decision was not challenged by the Revenue. The Tribunal held that the Commissioner rightly concluded that the respondent's activity did not fall under Clearing & Forwarding Agent Services, as the Revenue did not contest this finding.

2. The Tribunal emphasized that the Revenue's failure to challenge the Commissioner's decision on the nature of the activity meant that the issue was settled. It was noted that the Revenue's allegations were not adequately defended by the respondent, as they were not given the opportunity to address the specific challenge raised. Despite this, the Commissioner's finding that the activity did not fall under Clearing & Forwarding Agent Services remained unchallenged. Therefore, the Tribunal upheld the Commissioner's decision and dismissed the Revenue's appeal, finding no fault in the impugned order.

In conclusion, the Tribunal affirmed the decision that the respondent's activity did not fall under Clearing & Forwarding Agent Services. The appeal by the Revenue was dismissed, and the Cross Objection was disposed of accordingly.