9911796707
TMI Blog2006 (11) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and were receiving commission from their principal as remuneration. They were liable to pay Service Tax @ 5% of the value of remuneration received from 1st Sept. 1999 as per the provisions contained in Section 65 and Section 66 of the Finance Act 1994. 3. On examination of the balance sheet schedule 11 and ledgers for the year 2001-02 to 2003-04 (Upto 30-06-2003) it was observed that the appellant has received remuneration to the tune of ₹ 2,62,29,659/- for providing services of commission agent/sole selling agent. The department being of the view that such services of procuring the orders for their principles is taxable under the heading of C F services as defined under Section 65(16) of the Finance Act 1944. Service Tax to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under C F operation. Reliance has been placed on CESTAT order in the case of Mahavir Generies v. CCE Bangalore, [2006 (3) S.T.R. 276 (T) = 2004 (170) E.L.T. 78 (Tri.-Del.)] and CCE, Kanpur v. Ram Shree Steels (P) Ltd. [2006 (3) S.T.R. 709 (T) = 2005 (186) E.L.T. 411 = 2005 (3) STJ 367)J. The order passed by adjudicating authority is in contravention of the provisions contained in Mumbai-I Commissionerate trade notice No. 59/99 dated and CBEC Circular No. 59/8/2003 dated 20-06-03 in which activities of commission agent and consignment/commi-ssion agent has been explained at length. Since the demand of Service Tax is not sustainable, demand for interest and imposition of penalty, as alleged in Show Cause Notice, are also not sustainab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arson Toubro v. CCE, Chennai [2006 (3) S.T.R. 321 (T-LB)] in which it has been held that mere booking orders for the principal by an agent on commission basis is covered under Business Auxiliary Service and will not be covered under C F Agent Service. Further, reliance has also been placed on Order-in-Original No. 27/Commissioner/MP/2006 dated 18-10-06 passed by Commissioner, Central Excise, Kanpur in which under similar circumstances, order has been passed after taking reliance of Larson Toubro case, supra. 10. As per Section 65(25) of the Act, C F Agent means any person who is engaged in providing any service either directly or indirectly connected with clearing and forwarding operation in any manner to any other person and include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration. Activity of procuring orders is, thus, independent of clearing and forwarding operation. Clearing and forwarding operation do not flow directly or indirectly form mere procurement of orders for the principal unless the same is followed by the activities of clearing and forwarding the goods. The plea of indirectly or in any manner is sustainable only when some clearing and forwarding operation is undertaken by the service provider, but there is nothing on record to prove the case of the department. The adjudicating authority has solely relied upon the CESTAT order in the case of Prabhat Zarda Factory [2006 (2) S.T.R. 584 (T)] = [2002(145) E.L.T. 222 (T)] while passing the impugned Order-in-Original, which now stands overruled. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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