2014 (3) TMI 336 - AT - Service Tax

Clearing & Forwarding Agency Service - Imposition of interest and penalty - Held that - it is evident that the appellant is rendering freight forwarding service. Freight forwarding is distinct and different from Clearing & Forwarding Agency Service as defined in law - services rendered by the appellant do not come under the category of Clearing & Forwarding Agency Service - Decided in favour of assessee.

Summary

Issues:
- Whether the services rendered by the appellant fall under the category of "Clearing & Forwarding Agency Service" for the purpose of Service Tax liability?

Analysis:

The case involved an appeal against an Order-in-Appeal passed by the Commissioner of Central Excise (Appeals) regarding the categorization of services provided by M/s. Swagat Freight Carriers Pvt. Ltd. The appellant, a freight forwarder, collected charges for various services like documentation, transportation, and shipping bill charges. The department contended that these services fell under "Clearing & Forwarding Agency Service" and demanded Service Tax along with penalties. The appellant argued that they were engaged in freight forwarding business and had been paying Service Tax under "Business Auxiliary Service" since 1-7-2003. They relied on legal precedents to support their position.

The appellant's counsel highlighted that the services provided were distinct from "Clearing & Forwarding Agency Service" as defined in the law. After considering the arguments and reviewing the case records, the Tribunal agreed with the appellant. It was noted that freight forwarding is a separate service from "Clearing & Forwarding Agency Service." Citing the legal decisions referenced by the appellant, the Tribunal concluded that the services offered by the appellant did not fall under the category of "Clearing & Forwarding Agency Service." As a result, the impugned order was set aside, and the appeal was allowed with any consequential relief to be granted in accordance with the law.

This judgment clarifies the distinction between freight forwarding and "Clearing & Forwarding Agency Service" for the purpose of Service Tax liability. The Tribunal's decision was based on a thorough analysis of the services provided by the appellant and the legal framework governing such services. The reliance on legal precedents further strengthened the appellant's argument and ultimately led to a favorable outcome in the appeal.