2018 (2) TMI 1566 - AT - Service Tax

Clearing and Forwarding Agents service - activity of lifting and handling of iron & steel products from SAIL RINL and TATA - non-payment of service tax - Held that - in the present case the original authority has not passed the order as per the direction of the remand order of the Commissioner (Appeals). We also find that the original authority has reconfirmed the demand and the penalties without applying its mind as per the direction of the remand order. Also the service rendered by the appellant does not fall under the category of Clearing & Forwarding Agent service because they were not receiving the goods nor storing them nor forwarding those to the clients but they are only supervising the loading of the goods at the stockyards of SAIL RINL and Tisco for which they paid handling charges which does not fall under the category of Clearing & Forward Agent service. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against order rejecting appeal and upholding original authority's decision regarding service tax liability for Clearing and Forwarding Agent services.

Analysis:
The appellant rendered services as Clearing and Forwarding Agents and received Brokerage/Commission without paying service tax, leading to a show-cause notice. The Dy. Commissioner confirmed the service tax demand of ?1,01,706 and imposed penalties under various sections. The matter was remanded by the Commissioner (Appeals) to examine specific pleas regarding the nature of services provided. The respondent decided the case based on the Commissioner's direction.

The appellant, aggrieved by the order-in-original, filed an appeal before the Commissioner (Appeals) who rejected it, prompting the present appeal. Despite the appellant's counsel withdrawing representation, written submissions were filed for consideration. The appellant argued that the impugned order did not consider legal principles, and the Commissioner (Appeals) erred in not examining the taxability of the services under the category of Clearing and Forwarding Agent solely based on the remand order.

The Tribunal noted that the original authority did not follow the remand order's direction in reconfirming the demand and penalties. It was observed that the appellant's activities did not align with the Clearing and Forwarding Agent service category, as they were only supervising loading at stockyards and paying handling charges, not involved in storing or forwarding goods. Consequently, the impugned order was deemed unsustainable in law, leading to the allowance of the appellant's appeal.

In conclusion, the Tribunal set aside the impugned order and allowed the appellant's appeal, emphasizing the mismatch between the appellant's services and the Clearing and Forwarding Agent category. The judgment was pronounced on 30/1/2018.