2015 (3) TMI 744 - HC - Service Tax

Clearing and forwarding agent service - Whether in the facts and circumstances of the case, the finding of the Tribunal that the appellant/corporation is engaged in purchase/sale of liquor is a perverse finding and the Corporation is C & F agent as defined in Section 65(25) of the Finance Act, 1994 - Held that - It is not disputed that if the corporation was engaged in sale and purchase of liquor for the State, then no service tax was payable. - The Tribunal has recorded a finding of fact that the Corporation was engaged in purchase and sale of liquor and could not be considered as clearing and forwarding agent for the State Government. It is finding of fact. No illegality in the finding has been pointed out. - No merit in appeal - Decided against Revenue.

Summary

Issues:
1. Appeal under section 35G of the Central Excise Act against an order passed by the Tribunal.
2. Classification of the Corporation as a clearing and forwarding agent or a procurement agent for sale and purchase of liquor.
3. Confirmation of demand, interest, and penalty under the Finance Act, 1994.
4. Adjudication Officer's order being set aside and appeal by the Department against the same.

Analysis:

1. The appeal in question was filed under section 35G of the Central Excise Act challenging the order passed by the Tribunal, which had allowed the appeal of M/s Chhattisgarh State Beverages Corporation against the demand raised by the Adjudicating Officer.

2. The main issue revolved around the classification of the Corporation as either a clearing and forwarding agent or a procurement agent for the sale and purchase of liquor. The Corporation claimed to be a procurement agent, while the Department alleged it to be a clearing and forwarding agent for the State Government.

3. The Adjudicating Officer, through an order dated 23.03.2007, confirmed the demand raised on the Corporation, along with interest under section 75 of the Finance Act, 1994, and imposed penalties under sections 75-A, 76, 77, and 78 of the Act. However, the Tribunal, in its order dated 25.08.2008, allowed the Corporation's appeal, setting aside the Adjudication Officer's order, which led to the Department filing the present appeal.

4. The High Court, after hearing the counsels for both parties, admitted the appeal based on the substantial question of law regarding the Tribunal's finding that the Corporation was engaged in the purchase and sale of liquor rather than being a clearing and forwarding agent as alleged by the Department.

5. The Tribunal's factual finding that the Corporation was indeed involved in the sale and purchase of liquor and not functioning as a clearing and forwarding agent was upheld by the High Court. As no illegality in this finding was pointed out, the appeal by the Department was dismissed for lacking merit.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the subsequent decision rendered by the High Court in this case.