2009 (6) TMI 168 - AT - Service Tax

The appellants are Clearing and Forwarding cum Re-packing agent of T.C.L. - The appellants in addition to the charges of C&F agency were also recovering additional amount as Storage and Warehousing charges Cargo handling charges and Packing charges. In the impugned order it has been held that they are liable to pay Service Tax on these charges revenue having case in respect of repacking activity of the appellant warehouse to be maintained by C & F Agent and therefore collection of separate warehousing charges does not appear to be correct - Similarly loading/unloading also is a part of C&F agent service and therefore prima facie it appears that the appellants would be liable to pay tax separately if they charge for these services separately since they cannot be called as reimbursable expenses. - The appellants have not been able to make any strong case in their favour Held that it would be appropriate to require the appellants to deposit 20% of the service tax demanded pre-deposit of balance amount waived

Summary

The Appellate Tribunal C Cloths, AHMEDABAD, consisting of S/Shri B.S.V. Murthy and Ashok Jindal, heard the case involving the liability of the appellants, Clearing and Forwarding cum Re-packing agents of M/s. Tata Chemicals, to pay Service Tax on additional charges such as Storage and Warehousing, Cargo handling, and Packing charges. The impugned order demanded a service tax amounting to Rs. 6,15,146 for the period August 2002 to November 2006, along with penalties under the Finance Act 1994. The appellant argued that they were only providing C&F agent services and not other services, citing various tribunal decisions in support. The JDR contended that the appellant was designated as a repacking agent and that the activity of repacking is clearly a business auxiliary service. The tribunal noted that a C&F agent is required to maintain a warehouse and handle loading/unloading, which prima facie suggests a separate tax liability. However, the issue is considered arguable and requires detailed consideration. The tribunal ordered the appellants to deposit 20% of the service tax demanded for compliance with Section 35F of C.E.A., 1944, allowing a stay of the balance amount, interest, and penalties during the appeal's pendency. The final decision was pronounced in court.