2010 (4) TMI 558 - AT - Service Tax

C & F Agent Services - suppression the value of service resulting in evasion of service tax - also operated without taking service tax registration - Penalties of different amounts on both the appellants were also imposed Assessee engaged in the clearing and forwarding of the goods namely fly ash inasmuch as they off took the fly ash from various thermal power plants on behalf of M/s. E.I.L - They packed the fly ash in gunny bags after proper storage and undertook the delivery of the goods at various premises of M/s. E.I.L. The appellants claimed that they were transporters of the goods and they had not provided C&F Agent Services - C & F Agents were working only in customs connected area but not in other area was discarded Held that - remand the matter back to the learned Adjudicating Authority to re-examine the issue and after granting fair opportunity of hearing to the appellants pass a reasoned and speaking order. He shall record the nature of services provided by the appellants and terms and conditions of work order and law on the subject, pleading of both sides and reasons of his decision.

Summary

Issues:
Appeal against order upholding evasion of service tax and penalties for providing C & F Agent Services without registration. Dispute over whether appellants provided transport service or C & F Agent Services. Examination of terms of contract and nature of services provided.

Analysis:
The appellants appealed against an order upholding evasion of service tax and penalties for providing C & F Agent Services without registration. The First Appellate Authority found that the appellants provided C & F Agent Services, suppressing the value of service and evading service tax for specific periods. The issue revolved around whether the appellants were service providers to M/s. E.I.L. engaged in clearing and forwarding goods or merely transporters of the goods. The appellants claimed they were transporters, but the Commissioner (Appeals) disagreed, relying on circulars to conclude that the appellants provided C & F Agent Services.

The appellants argued that they only provided transport service, highlighting the withdrawal and reintroduction of service tax on transport agencies. They contended that the terms of the contract were not examined properly by the Adjudicating Authority, leading to a mechanical conclusion of C & F Agent Services. The Revenue supported the lower authority's findings, emphasizing a thorough examination of the transactions by the appellants, leading to the conclusion of C & F Agent Services.

Upon hearing both sides and reviewing the records, the Tribunal observed that the terms and conditions of the work order were not adequately examined by the Adjudicating Authority. The Tribunal noted that the appellants were brought into the legal framework during the initial implementation of the Finance Act, 1994 when the status of C & F Agents was debated. As a result, the matter was remanded back to the Adjudicating Authority for a re-examination of the issue. The Authority was instructed to consider various judgments, re-examine the terms of the contract, record the nature of services provided, and provide a reasoned decision after granting a fair opportunity of hearing to the appellants.

In conclusion, the Tribunal remanded both appeals, setting aside the appellate order, to allow for a comprehensive re-examination of the issue regarding the nature of services provided by the appellants and the terms and conditions of the work order in light of the legal framework and arguments presented by both sides.