2010 (8) TMI 81 - HC - Service Tax

Clearing and Forwarding Agent s Services - the appellant was appointed by the principal as agent for selling of goods of the principal. Goods were supplied by the principal at the premises of the appellant, which were sold by the appellant at the price fixed by the principal, by issuing invoices and at their own will. Payment was thereafter collected by the appellant and remitted to the principal. In the event of delay in remitting payment, interest was to be born by the appellant and for all these activities fixed commission was received by the appellant from the principal. - Held that - The services provided by the consignment agent are different than those provided by the commission agent. A Clearing and Forwarding Agent s job is to receive the goods from the principal and dispatch them on the directions of the principal, whereas a commission agent s job is to cause sale and purchase on behalf of another person. - in favor of revenue

Summary

Issues:
Challenge to final order by Central Excise Service Tax Appellate Tribunal; Interpretation of terms and conditions of agreement; Nature of services provided by appellant; Distinction between commission agent and consignment agent; Application of CBEC Circular.

Analysis:
The appellant filed an Excise Appeal challenging the final order of the Central Excise Service Tax Appellate Tribunal, which upheld the original order passed by the Adjudicating Authority. The appellant argued that the authorities failed to consider the terms of the agreement with their principal, which resembled a previous judgment. They contended that they acted as an agent for selling goods, not a clearing and forwarding agency. The Tribunal did not address these arguments, relying on a different case. The appellant claimed they provided services as a "Del-Credre" agent, falling under "Commission Agent" services, not clearing and forwarding services. They sought a refund of a specific sum.

The Adjudicating Authority and the Appellate Authority rejected the appellant's argument, stating that the services provided were akin to a "Del-Credre" agent, falling under "Commission Agent" services. They referred to relevant sections of the Finance Act, defining taxable services and clearing and forwarding agents. The Adjudicating Authority distinguished between commission agents and consignment agents, noting that consignment agent services are taxable under clearing and forwarding services. The Appellate Authority concurred with this view, citing previous judgments. The Tribunal upheld these decisions, emphasizing that the appellant's activities aligned with clearing and forwarding services based on the nature of the agreement and CBEC Circular.

Ultimately, the Court dismissed the appeal, finding no merit in the appellant's arguments. The Court agreed with the Tribunal's analysis that the appellant's activities fell within the category of clearing and forwarding agency as per the law and the CBEC Circular. The judgment highlighted the importance of the agreement's characteristics in determining the nature of the services provided, ultimately supporting the Tribunal's decision.