2010 (7) TMI 192 - HC - Service Tax

Clearing and Forwarding Agent services Agreement conditions indicating respondent acting as del credere agent and such person covered under Business Auxiliary Services. Held that period involved from 1.10.1999 to 30.09.2004 and prior to amendment of Business Auxiliary Services from 16.6.2005. High Court already decided identical issue before. Impugned activity not covered under C&F Agent Service. Thus the answer is in favour of assessee.

Summary

Issues:
1. Whether the activity of the respondent falls under taxable services as "Clearing and Forwarding Agent Services" under the Finance Act, 1994?
2. Whether relying on a specific judgment while it is pending before the Hon'ble Court is justified?
3. Whether the services rendered by the respondent align with the Circular's classification of Clearing and Forwarding Agents?

Analysis:
1. The case involved a dispute regarding the classification of services rendered by the respondent as "Clearing and Forwarding Agent Services" under the Finance Act, 1994. The respondent had entered into an agreement with a company to promote and sell products, passing orders to the company, with goods dispatched directly from the company's factory. The Revenue contended that the services fell under taxable services, leading to a show cause notice and subsequent penalties. However, the Tribunal and the Appellate Authority ruled in favor of the respondent, considering the nature of the services provided. The High Court analyzed the definitions of "Clearing and Forwarding Agent" and "Business Auxiliary Service" under the Finance Act, 1994. It concluded that the respondent was a del credere agent, not a clearing and forwarding agent, based on the terms of the agreement, and thus not liable for service tax.

2. The High Court addressed the issue of relying on a specific judgment while it was pending before the Hon'ble Court. The Court considered previous decisions on identical questions of law and facts, highlighting the consistency in the interpretation of the law. The Court emphasized the relevance of past judgments in determining the outcome of the present appeal, leading to a dismissal of the appeal against the Revenue.

3. Regarding the alignment of services with Circular classifications, the Court examined the terms and conditions of the agreement between the respondent and the company. Specific clauses indicated that the respondent acted as a del credere agent, falling under the category of "Business Auxiliary Service" as per the Finance Act, 1994. The Court emphasized that the facts of the case, including the period in question and the nature of services provided, were consistent with previous decisions, leading to a ruling against the Revenue and in favor of the respondent. The Court dismissed the appeal, upholding the decision of the Tribunal and the Appellate Authority.