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2018 (10) TMI 475 - AT - Service TaxNature of activity - Trade or service? - appellant engaged in trading of Cement of M/s. Indian Cement Ltd., Hyderabad, a manufacturer of cement under the brand name Rassi - It is the case of the appellant that they are selling goods on own account and not on direction of principal and are not rendering either C & F Agent Services or the Services of the consignment agent since they are not undertaking the forwarding activities on behalf of their principals M/s. India Cement Ltd - whether the services provided by the appellant are covered under the category of clearing and forwarding agent service ? Held that - The issue is no more res-entigra, in view of the decision of the Hon ble Supreme Court in the case of Coal Handlers Private Ltd. Vs. CCE, Range Kolkata-I 2015 (5) TMI 249 - SUPREME COURT , where it was held that At no stage custody of the coal is taken by the appellant or transportation of the coal, as forwarders, is arranged by the appellant. We are, thus, of the clear opinion that the services rendered by the appellant would not qualify as C&F Agent within the meaning of Section 65(25) of the Act. Demand set aside - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Whether the appellant is liable to pay Service Tax under the category of "Clearing and Forwarding Agent Services." 2. Whether the demand is barred by limitation. Issue-wise Detailed Analysis: 1. Liability to Pay Service Tax under "Clearing and Forwarding Agent Services": The primary dispute revolves around whether the services provided by the appellant fall under the category of "Clearing and Forwarding Agent Services" as defined under Section 65(25) of the Finance Act, 1994. The appellant argued that they only provided clearing services and not forwarding services, and thus should not be classified as a Clearing and Forwarding (C&F) Agent. The appellant's responsibilities included unloading at goods-sheds, transportation at goods-sheds, unloading at the go-down, and loading from the go-down. They claimed to sell the goods independently without any obligation to dispatch goods as per the principal's direction, which is a typical function of a consignment agent. The Tribunal referenced the Hon’ble Supreme Court's decision in Coal Handlers Private Ltd. Vs. CCE, Range Kolkata-I, which clarified the definition and scope of activities of a C&F Agent. According to the Supreme Court, a C&F Agent typically undertakes activities like receiving goods from the principal, warehousing, receiving dispatch orders, arranging dispatch, maintaining records, and preparing invoices. The Tribunal noted that the appellant did not engage in forwarding operations or undertake any of these typical C&F activities. The appellant's role was limited to clearing operations and did not qualify as a C&F Agent. 2. Demand Barred by Limitation: The appellant contended that the demand was barred by limitation, asserting that they were under a bona fide belief that they were not liable to pay Service Tax and had no intent to evade the tax. The Tribunal did not specifically address this issue in detail, as the primary determination that the appellant's services did not qualify as C&F Agent services rendered the question of limitation moot. Conclusion: The Tribunal concluded that the services provided by the appellant did not fall within the definition of "Clearing and Forwarding Agent" under Section 65(25) of the Finance Act, 1994. Therefore, the appellant was not liable to pay the Service Tax demanded. Consequently, the impugned orders were set aside, and the appeal was allowed with consequential relief to the appellant. Order Pronounced: The order was pronounced in the open court on 24/09/2018, setting aside the impugned orders and allowing the appeal filed by the appellant.
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