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TMI Blog2006 (9) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 400/- PMT shall be paid to the consignment stockist for getting/booking orders for the product of M/s GAIL. (iii) Rs. 100/- PMT shall be paid to the consignment stockist for release/clearance of product locally from their stock on the orders booked by M/s. GAIL directly." In reply dated 8-1-2004 to the said show cause notice, the appellant contended as under: "We refer to Show Cause Notice No. V (ST) 21 /D/LDH-II/9/03/8420, dated 20-10-2003 and case fixed for hearing on 8-1-2004 before you. We have deposited Rs. 25,000.00 vide Challan No. 01 /SPL, dated 10-1-2003 a photocopy of the same is enclosed herewith for your ready reference and records. Sir, we hereby stated that due to financial crises, our all units are closed since February, 2003. On these adverse circumstances, we have to file our application with BIFR a copy of registration with BIFR is enclosed herewith for your ready reference. Sir, we are not in position to deposit balance service tax in one instalment. Therefore, you are requested to please allow us for deposit balance service tax on instalments." The learned Deputy Commissioner vide his order-in-original dated 17-3-2004 concluded that the appellant has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he principal service if it does not constitute for customers and aim in itself, but a means of better enjoying the principal service supplied. 6. In the later case. (2001 UKHL/4) the House of Lords had an occasion to examine fifteen types of services, namely, for example, Confidential Registration, Insurance Cover, Un-limited Protection, Immediate Loss Notification, Replacement Cards etc. etc.) rendered in what is "called Card Protection Plan" (CPP). It was observed that, an overall view should be taken and over-zealous dissecting and analysis of particular clauses should be avoided. The essential feature of the scheme or its dominant purpose was identified as the provision of insurance cover against the loss arising from misuse of credit card and had to suffer tax. 7. Drawing a clue from this case, the learned Counsel argues that in the case before us, the appellant is engaged in storage and selling, and if at all some activities of clearing and forwarding operations show their heads, only the over all context of storage and selling has to be taken into account, ignoring the incidental activities of clearing and forwarding. As these activities are inseparably and intricately con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon definition of "consignment" as defined in Black's Law Dictionary: "Consignment. The Act or process of consigning goods; the transportation of goods consigned; an article or collection of goods sent to a factor; goods or property sent, by the aid of a common carrier, from one person in one place to another person in another place; something consigned and shipped. Entrusting of goods to another to sell for the consignor. A bailment for sale. The term "consignment", used in a commercial sense, ordinarily implies an agency and denotes that property is committed to the consignee for care or sale. Parks v Atlanta News Agency, Inc., 115 Ga.App.842, 156 S.E. 2d 137,140." 12. He also heavily relied upon this Tribunal's judgment in Mahavir Generics v. CCE, Bangalore - 2006 (3) S.T.R. 276 (T) = 2004 (170) E.L.T. 78 (T-Del), which happened to examine a similar agreement. It was held in para 8 of the said judgment that the agreement with specific reference to the clauses would show that the appellant was not acting as a clearing & forwarding agent. It was also recognized that the tax liability was attached to the taxable service alone, and so long as the appellant was not p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivities were only ancillary in nature and the tax levy should be addressed only in respect of the principal service which is made taxable under the law. 17. It was also argued by the learned Authorised Representative of the Department that the very definition under Section 65(25) has created a legal fiction inasmuch as the consignment agent whether engaged in the activities of clearing and forwarding or not has to be included as rendering taxable service. On going through the Section 65(105) (j) of the Finance Act, 1994 which defines the 'Taxable Service', which is reproduced below: "Section 65(105) (j). to a client, by clearing and forwarding agent in relation to clearing and forwarding operations, in any manner;" 18. Having heard both the sides for long and on going through the record, more particularly, an agreement rifled as "Consignment Stockist Agreement" made on the 12th January, 1999, particularly, Clause (4) of the said Agreement, it is apparent that the principal Company shall make available the product from its factory/warehouse for the consignment stockist. This would evidently mean that the appellant has to lift or make arrangements to lift the goods from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g, receiving, stocking and delivering the goods to the buyers, clearly make a clear chain of activities, involving clearing and forwarding operations. Clause 8(3) of the contract spells out such an arrangement in no unclear terms: "8.3 In case of any stock transfer consignment is received in damaged condition, consignment stockist shall record the same on the original lorry receipt indicating the number of damages bags and lodge the claim on transporter within five days under registered acknowledgement due and simultaneously send intimation to the company together with a copy of the claim." 20. The argument made on behalf of the appellant that Para 8.3 of the said agreement makes it clear that they only received the goods and based on this, the contention that their case was akin to the case of Mahavir Generics, supra, appears to us rather misconceived in view of the fact that the other terms conditions of contract required them to work towards distribution, stocking or delivery from the factory/warehouse of the principal. 21. The argument that the activities undertaken by the appellant was of composite nature and it was necessary that the essential characteristics of their acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mphony, it does not cease to be otherwise a part of the orchestra. While forming this view, we have certainly not overlooked the fact that while music can be sometimes taxing, a tax can never be musical'. 24. The Circular dated 11th July, 1997 issued by the Central Board of Excise & Customs acknowledges the following activities "normally" undertaken by a Clearing & Forwarding Agent: "(a) Receiving the goods from the factories or premises of the principal or his agents; (b) Warehousing these goods; (c) Receiving despatch orders from the principal; (d) Arranging despatch of goods as per the directions of the principal by engaging transport on his own or through the authorised transporters of the principal; (e) Maintaining records of the receipt and despatch of goods and the stock available at the warehouse; (f) Preparing invoices on behalf of the principal." In our opinion, each and every one of these need not be carried out in a clinical precision in order to make one a clearing & forwarding agent. 25. Further, a plain reading of Section 65(25) of the Finance Act, 1994 which defines "Clearing & Forwarding Agents" would show that a "consignm ..... 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