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TMI Blog2009 (7) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... and Rule 4 of the Service Tax Rules, 1994. 3. The petitioners claim that the petitioner company has entered into liasoning agreements with various industrial concerns, that are bulk consumers of coal. 4. According to the petitioners, the various industrial concerns and power plants, with which the petitioner company has executed liasoning agreements, are required to make bulk purchase of coal from different collieries located all over India. 5. As per the existing practice, the Standing Linkage Committee which is a body constituted under the Ministry of Coal, Government of India, with representatives of coal companies, railways, bulk consumers and coal ministry officials, makes allotment of coal to bulk consumers from different coal mines. 6. According to the petitioners, the coal companies despatch coal from the collieries and have the same loaded into wagons. The petitioner company is engaged by bulk coal consumers for the work of liasoning, coordination and supervision on their behalf, to facilitate movement of coal to plants and factories. The petitioner company only supervises the loading of coal, ensuring that proper indents are placed, the requisite quality of coal is lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of this sub-clause, "inputs" means all goods or services intended for use by the client:] (v) production or processing of goods for, or on behalf of, the client; (vi) provision of service on behalf of the client; or (vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision and includes services as a commission agent, but does not include any information technology service and any activity that amounts to "manufacture" within the meaning of clause (f) of section 2 of the Central Excise Act, 1944 (1 of 1944). [Explanation.-For the removal of doubts, it is hereby declared that for the purposes of this clause.- (a) "commission agent" means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person- (i) deals with goods or services or documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll apply to such person as if he is the person liable for paying the service tax in relation to such service." 13. The Ministry of Finance, Department of Revenue, Tax Research Unit issued Notification No.B 43/7/97-TRU dated 11th July, 1997, the relevant parts whereof are extracted hereinbelow: "I am directed to invite your attention to Section 88 of the Finance Act, 1997 which, inter alia, provides for levy of service tax on the services rendered by clearing and forwarding agents and rent-a-cab scheme operators. It has been decided to bring the above services under the service tax net with effect from 16th July, 1997. Notification Nos.26/97-ST and 27/97-ST, both dated the 11th July, 1997 have been issued in this regard (copies enclosed). 2. CLEARING AND FORWARDING AGENTS 2.1 "Clearing and forwarding agent" has been defined as "any person who is engaged in providing any service, either directly or indirectly, connected with clearing and forwarding operations in any manner to any other person and includes a consigning agent." The taxable service has been defined as "any service provided to a client, by C & F agent in relation to clearing and forwarding agents are engaged/appointe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mises of the principal or his agents, stores these goods, despatches these goods as per orders received from the Principal or owner, arranges transport, etc. for the purpose and prepares invoices on behalf of the Principal. For this service, the C & F agents receives commissions on the basis of agreed terms. Therefore, an essential characteristic of any services, to fall in the category of C & F agent, is that the relationship between the service provider and receiver should be in the nature of principal (owner) and agent. The C & F agent carries out all activities in respect of goods right from stage of their clearances from the premises of the principal to its storage and delivery to the customers." 16. Mr. Poddar appearing on behalf of the petitioner company submitted that the service rendered by the petitioner company to its clients was not that of a clearing and forwarding agent. 17. Even after the Finance Act, 1993, imposed service tax on 'business auxiliary service', the service rendered by the petitioner company did not come within the definition of business auxiliary service. 18. Mr. Poddar submitted that with the amendment of the definition of 'business aux ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified in the notice: .................... .................... Rule 4 of the Service Tax Rules, 1994 provides as follows: R.4. Registration (1) Every person liable for paying the Service Tax shall make an application to the concerned Superintendent of Central Excise appointed under Rule 3 in Form ST-1 for registration within a period of thirty days from the date on which the service tax under section 66 of the Finance Act, 1994 (32 of 1994) is levied. Provided that where a person commences the business of providing a taxable service after such service has been levied, he shall make an application for registration within a period of thirty days from the date of such commencement. Provided further that a person liable for paying the service tax in the case of taxable services referred to in subsection (4) of sub-section (5) of section 66 of the Finance Act, 1994 (32 of 1994) may make an application for registration on or before the 31st day of December, 1998: Provided also that a person liable for paying the service tax in the case of taxable services to in sub-clause (zzp) of clause (105) of section 65 of the Act may make an application for registration on or before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant Commissioner of Service Tax (Technical) requested the petitioner company to resubmit its application for centralized registration in the category of "service of clearing and forwarding agent" by filing a fresh Form ST-1. 22. In reply, the petitioners wrote a letter dated 8th February, 2006, objecting to the direction to resubmit the application for centralized registration in the category of clearing and forwarding agency and requesting that the application of the petitioners for centralized registration in the category of "business auxiliary service" be reconsidered. 23. By a letter dated 27th March, 2006, the Assistant Commissioner of Sales Tax (Technical) advised the petitioners to deposit tax along with interest, if any, by filling in "applied for" in place of registration number in the 'challan'. 24. While decision on the application of the petitioner company for registration, was pending the Superintendent (Audit) Central Excise and Customs, Bhubaneswar-1, examined the same kind of contract between the petitioner company and Tamil Nadu State Electricity Board and issued a memo dated 25th May, 2006, inter alia observing as follows: "In course of audit in the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmr./ST/Kol./2006-07 dated 30th March, 2007 whereby the petitioner company was assessed to service tax in the category of clearing and forwarding agent, for the period from 1st September, 1999 to 31st March, 2004 along with interest and penalty. 30. On 27th June, 2007, the petitioner company filed an appeal being Appeal No.30/37 against the said order before the Central Excise and Service Tax Appellate Tribunal. Kolkata and also made an application in the appeal, for stay of operation of the said order. It is submitted that the appeal as also the stay application is pending. 31. In the meanwhile, the petitioners received another letter dated 12th April, 2007 calling upon the petitioners to apply for registration in the category of service provided by a clearing and forwarding agent. The petitioners replied to the said letter reiterating its earlier stand. 32. On or about 3rd September, 2007, the petitioner company received a letter requesting it to contact jurisdictional Assistant Commissioner of Service Tax, Division 1, Kolkata for obtaining the registration certificate and location code. 33. By a letter dated 11th September, 2007 the Deputy Commissioner of Service Tax, Kolkat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Chief Commissioner of Service Tax in whose jurisdiction the premises of the petitioner company, from where centralized billing/accounting is done, is located. 41. There being no time stipulation on the Commissioner of Central Excise to grant centralized registration under sub-rule 2, the provision of deemed registration is not attracted in case of grant of registration by the Commissioner. 42. It is true, every person liable to pay service tax is required under subrule 1 of Rule 4 of the Service Tax Rules, 1994, to apply to the Superintendent of Central Excise for registration in Form ST-1. 43. It is immaterial that all applications might have to be submitted to the Superintendent of Central Excise. Registration under sub-rule 2 can only be granted by the Commissioner. Rule 4 of the Service Tax Rules is not really inconsistent with Section 69 of the Finance Act, 1994, which requires that all applications for registration have to be submitted to the Superintendent of Central Excise. Section 69 does not denude the Commissioner of authority to grant registration. 44. There can be no doubt that registration cannot be indefinitely delayed. Registration has to be granted within re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Central Excise Bolpur vs. Ratan Melting and Wire Industries reported in 2008 (231) ELT 22 (SC) Mr. Roy Chowdhury submitted that the Department can also challenge circulars of the Central Board of Excise. In the aforesaid case, Supreme Court held as follows: "Circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Court to direct that the circular should be given effect to and not the view expressed in a decision of this Court or the High Court. So far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the statutory provisions. They are not binding upon the court. It is for the Court to declare what the particular provision of statute says and it is not for the Executive. Looked at from another angle, a circular which is contrary to the statutory provisions has really no existence in law." 51. The judgment is not applicable in this case. There is no decision of Court t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l within the category of service of a clearing and forwarding agent. 58. As rightly argued by Mr. Poddar, the Finance Act 1994 does not specify the activities that would constitute clearing and forwarding operations. In Advanced Law Lexicon (3rd Edn.) the expression 'clearing agent' has been defined to mean "an agent on behalf of a shipper to clear goods through customs and other formalities on arrival." The Random House Compact Dictionary defines the word "clear" as to free a ship of cargo. 59. Mr. Poddar submitted that the activity of clearing involved freeing a of cargo. However, in terms of the contract with the coal companies, the coal companies were responsible for loading coal into railway wagons. The petitioner company did not have to clear coal from the mines. The petitioner only supervised the loading to ensure that the wagons were fully utilized and coal of the requisite quality was loaded. 60. Similarly, the word 'forward" would mean to send towards the place of destination in terms of the meaning in Black's Law Dictionary. This, according to Mr. Poddar, is also not done by the petitioner company. 61. A clearing and forwarding agent undertakes the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight not be adjudicated by this Writ Court under Article 226 of the Constitution of India. However, as observed above, the facts are not disputed. There being no dispute with regard to facts, the question of classification would be a question of law. Reference may, in this context, be made to the judgment of the Supreme Court in State of Kerala & Ors. vs. Kumrin Abraham Pvt. Ltd. & Anr. reported in (2008) 13 VST 1 (SC) cited by Mr. Poddar. 67. In paragraph 100 of the writ petition, the petitioners have given instances of at least eight other concerns rendering the same services as the petitioner company, who have been given registration in the category of 'business auxiliary service'. The averments in the petition have not been controverted by the respondents. There is no attempt to explain the difference between the petitioner company and the concerns specified in Paragraph 100 of the writ petition. There is only a vague assertion of steps being taken for the registration of those concerns in the proper category. 68. If it is assumed that the averments in the writ petition with regard to the nature of service performed by the petitioner company are correct, the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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